[Congressional Record: October 8, 1998 (House)]
[Page H10048-H10074]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
[DOCID:cr08oc98-76]
CONFERENCE REPORT ON H.R. 2281, DIGITAL MILLENNIUM COPYRIGHT ACT
Mr. COBLE submitted the following conference report and statement on
the bill (H.R. 2281) to amend title 17, United States Code, to
implement the World Intellectual Property Organization Copyright Treaty
and Performances and Phonograms Treaty, and for other purposes:
Conference Report (H. Rept. 105-796)
The committee of conference on the disagreeing votes of the
two Houses on the amendment of the Senate to the bill (H.R.
2281), to amend title 17, United States Code, to implement
the World Intellectual Property Organization Copyright Treaty
and Performances and Phonograms Treaty, and for other
purposes, having met, after full and free conference, have
agreed to recommend and do recommend to their respective
Houses as follows:
[[Page H10049]]
That the House recede from its disagreement to the
amendment of the Senate and agree to the same with an
amendment as follows:
In lieu of the matter proposed to be inserted by the Senate
amendment, insert the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Digital Millennium Copyright
Act''.
SEC. 2. TABLE OF CONTENTS.
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--WIPO TREATIES IMPLEMENTATION
Sec. 101. Short title.
Sec. 102. Technical amendments.
Sec. 103. Copyright protection systems and copyright management
information.
Sec. 104. Evaluation of impact of copyright law and amendments on
electronic commerce and technological development.
Sec. 105. Effective date.
TITLE II--ONLINE COPYRIGHT INFRINGEMENT LIABILITY LIMITATION
Sec. 201. Short title.
Sec. 202. Limitations on liability for copyright infringement.
Sec. 203. Effective date.
TITLE III COMPUTER MAINTENANCE OR REPAIR COPYRIGHT EXEMPTION
Sec. 301. Short title.
Sec. 302. Limitations on exclusive rights; computer programs.
TITLE IV--MISCELLANEOUS PROVISIONS
Sec. 401. Provisions Relating to the Commissioner of Patents and
Trademarks and the Register of Copyrights.
Sec. 402. Ephemeral recordings.
Sec. 403. Limitations on exclusive rights; distance education.
Sec. 404. Exemption for libraries and archives.
Sec. 405. Scope of exclusive rights in sound recordings; ephemeral
recordings.
Sec. 406. Assumption of contractual obligations related to transfers of
rights in motion pictures.
Sec. 407. Effective date.
TITLE V--PROTECTION OF CERTAIN ORIGINAL DESIGNS
Sec. 501. Short title.
Sec. 502. Protection of certain original designs.
Sec. 503. Conforming amendments.
Sec. 504. Joint study of the effect of this title.
Sec. 505. Effective date.
TITLE I--WIPO TREATIES IMPLEMENTATION
SEC. 101. SHORT TITLE.
This title may be cited as the ``WIPO Copyright and
Performances and Phonograms Treaties Implementation Act of
1998''.
SEC. 102. TECHNICAL AMENDMENTS.
(a) Definitions.--Section 101 of title 17, United States
Code, is amended--
(1) by striking the definition of ``Berne Convention
work'';
(2) in the definition of ``The `country of origin' of a
Berne Convention work''--
(A) by striking ``The `country of origin' of a Berne
Convention work, for purposes of section 411, is the United
States if'' and inserting ``For purposes of section 411, a
work is a `United States work' only if'';
(B) in paragraph (1)--
(i) in subparagraph (B) by striking ``nation or nations
adhering to the Berne Convention'' and inserting ``treaty
party or parties'';
(ii) in subparagraph (C) by striking ``does not adhere to
the Berne Convention'' and inserting ``is not a treaty
party''; and
(iii) in subparagraph (D) by striking ``does not adhere to
the Berne Convention'' and inserting ``is not a treaty
party''; and
(C) in the matter following paragraph (3) by striking ``For
the purposes of section 411, the `country of origin' of any
other Berne Convention work is not the United States.'';
(3) by inserting after the definition of ``fixed'' the
following:
``The `Geneva Phonograms Convention' is the Convention for
the Protection of Producers of Phonograms Against
Unauthorized Duplication of Their Phonograms, concluded at
Geneva, Switzerland, on October 29, 1971.'';
(4) by inserting after the definition of ``including'' the
following:
``An `international agreement' is--
``(1) the Universal Copyright Convention;
``(2) the Geneva Phonograms Convention;
``(3) the Berne Convention;
``(4) the WTO Agreement;
``(5) the WIPO Copyright Treaty;
``(6) the WIPO Performances and Phonograms Treaty; and
``(7) any other copyright treaty to which the United States
is a party.'';
(5) by inserting after the definition of ``transmit'' the
following:
``A `treaty party' is a country or intergovernmental
organization other than the United States that is a party to
an international agreement.'';
(6) by inserting after the definition of ``widow'' the
following:
``The `WIPO Copyright Treaty' is the WIPO Copyright Treaty
concluded at Geneva, Switzerland, on December 20, 1996.'';
(7) by inserting after the definition of ``The `WIPO
Copyright Treaty' '' the following:
``The `WIPO Performances and Phonograms Treaty' is the WIPO
Performances and Phonograms Treaty concluded at Geneva,
Switzerland, on December 20, 1996.''; and
(8) by inserting after the definition of ``work made for
hire'' the following:
``The terms `WTO Agreement' and `WTO member country' have
the meanings given those terms in paragraphs (9) and (10),
respectively, of section 2 of the Uruguay Round Agreements
Act.''.
(b) Subject Matter of Copyright; National Origin.--Section
104 of title 17, United States Code, is amended--
(1) in subsection (b)--
(A) in paragraph (1) by striking ``foreign nation that is a
party to a copyright treaty to which the United States is
also a party'' and inserting ``treaty party'';
(B) in paragraph (2) by striking ``party to the Universal
Copyright Convention'' and inserting ``treaty party'';
(C) by redesignating paragraph (5) as paragraph (6);
(D) by redesignating paragraph (3) as paragraph (5) and
inserting it after paragraph (4);
(E) by inserting after paragraph (2) the following:
``(3) the work is a sound recording that was first fixed in
a treaty party; or'';
(F) in paragraph (4) by striking ``Berne Convention work''
and inserting ``pictorial, graphic, or sculptural work that
is incorporated in a building or other structure, or an
architectural work that is embodied in a building and the
building or structure is located in the United States or a
treaty party''; and
(G) by inserting after paragraph (6), as so redesignated,
the following:
``For purposes of paragraph (2), a work that is published in
the United States or a treaty party within 30 days after
publication in a foreign nation that is not a treaty party
shall be considered to be first published in the United
States or such treaty party, as the case may be.''; and
(2) by adding at the end the following new subsection:
``(d) Effect of Phonograms Treaties.--Notwithstanding the
provisions of subsection (b), no works other than sound
recordings shall be eligible for protection under this title
solely by virtue of the adherence of the United States to the
Geneva Phonograms Convention or the WIPO Performances and
Phonograms Treaty.''.
(c) Copyright in Restored Works.--Section 104A(h) of title
17, United States Code, is amended--
(1) in paragraph (1), by striking subparagraphs (A) and (B)
and inserting the following:
``(A) a nation adhering to the Berne Convention;
``(B) a WTO member country;
``(C) a nation adhering to the WIPO Copyright Treaty;
``(D) a nation adhering to the WIPO Performances and
Phonograms Treaty; or
``(E) subject to a Presidential proclamation under
subsection (g).'';
(2) by amending paragraph (3) to read as follows:
``(3) The term `eligible country' means a nation, other
than the United States, that--
``(A) becomes a WTO member country after the date of the
enactment of the Uruguay Round Agreements Act;
``(B) on such date of enactment is, or after such date of
enactment becomes, a nation adhering to the Berne Convention;
``(C) adheres to the WIPO Copyright Treaty;
``(D) adheres to the WIPO Performances and Phonograms
Treaty; or
``(E) after such date of enactment becomes subject to a
proclamation under subsection (g).'';
(3) in paragraph (6)--
(A) in subparagraph (C)(iii) by striking ``and'' after the
semicolon;
(B) at the end of subparagraph (D) by striking the period
and inserting ``; and''; and
(C) by adding after subparagraph (D) the following:
``(E) if the source country for the work is an eligible
country solely by virtue of its adherence to the WIPO
Performances and Phonograms Treaty, is a sound recording.'';
(4) in paragraph (8)(B)(i)--
(A) by inserting ``of which'' before ``the majority''; and
(B) by striking ``of eligible countries''; and
(5) by striking paragraph (9).
(d) Registration and Infringement Actions.--Section 411(a)
of title 17, United States Code, is amended in the first
sentence--
(1) by striking ``actions for infringement of copyright in
Berne Convention works whose country of origin is not the
United States and''; and
(2) by inserting ``United States'' after ``no action for
infringement of the copyright in any''.
(e) Statute of Limitations.--Section 507(a) of title 17,
United State Code, is amended by striking ``No'' and
inserting ``Except as expressly provided otherwise in this
title, no''.
SEC. 103. COPYRIGHT PROTECTION SYSTEMS AND COPYRIGHT
MANAGEMENT INFORMATION.
(a) In General.--Title 17, United States Code is amended by
adding at the end the following new chapter:
``CHAPTER 12--COPYRIGHT PROTECTION AND MANAGEMENT SYSTEMS
``Sec.
``1201. Circumvention of copyright protection systems.
``1202. Integrity of copyright management information.
``1203. Civil remedies.
``1204. Criminal offenses and penalties.
``1205. Savings clause.
``Sec. 1201. Circumvention of copyright protection systems
``(a) Violations Regarding Circumvention of Technological
Measures.--(1)(A) No person shall circumvent a technological
measure that effectively controls access to a work protected
under this title. The prohibition contained in the preceding
sentence shall take effect at the end of the 2-year period
beginning on the date of the enactment of this chapter.
[[Page H10050]]
``(B) The prohibition contained in subparagraph (A) shall
not apply to persons who are users of a copyrighted work
which is in a particular class of works, if such persons are,
or are likely to be in the succeeding 3-year period,
adversely affected by virtue of such prohibition in their
ability to make noninfringing uses of that particular
class of works under this title, as determined under
subparagraph (C).
``(C) During the 2-year period described in subparagraph
(A), and during each succeeding 3-year period, the Librarian
of Congress, upon the recommendation of the Register of
Copyrights, who shall consult with the Assistant Secretary
for Communications and Information of the Department of
Commerce and report and comment on his or her views in making
such recommendation, shall make the determination in a
rulemaking proceeding on the record for purposes of
subparagraph (B) of whether persons who are users of a
copyrighted work are, or are likely to be in the succeeding
3-year period, adversely affected by the prohibition under
subparagraph (A) in their ability to make noninfringing uses
under this title of a particular class of copyrighted works.
In conducting such rulemaking, the Librarian shall examine--
``(i) the availability for use of copyrighted works;
``(ii) the availability for use of works for nonprofit
archival, preservation, and educational purposes;
``(iii) the impact that the prohibition on the
circumvention of technological measures applied to
copyrighted works has on criticism, comment, news reporting,
teaching, scholarship, or research;
``(iv) the effect of circumvention of technological
measures on the market for or value of copyrighted works; and
``(v) such other factors as the Librarian considers
appropriate.
``(D) The Librarian shall publish any class of copyrighted
works for which the Librarian has determined, pursuant to the
rulemaking conducted under subparagraph (C), that
noninfringing uses by persons who are users of a copyrighted
work are, or are likely to be, adversely affected, and the
prohibition contained in subparagraph (A) shall not apply to
such users with respect to such class of works for the
ensuing 3-year period.
``(E) Neither the exception under subparagraph (B) from the
applicability of the prohibition contained in subparagraph
(A), nor any determination made in a rulemaking conducted
under subparagraph (C), may be used as a defense in any
action to enforce any provision of this title other than this
paragraph.
``(2) No person shall manufacture, import, offer to the
public, provide, or otherwise traffic in any technology,
product, service, device, component, or part thereof, that--
``(A) is primarily designed or produced for the purpose of
circumventing a technological measure that effectively
controls access to a work protected under this title;
``(B) has only limited commercially significant purpose or
use other than to circumvent a technological measure that
effectively controls access to a work protected under this
title; or
``(C) is marketed by that person or another acting in
concert with that person with that person's knowledge for use
in circumventing a technological measure that effectively
controls access to a work protected under this title.
``(3) As used in this subsection--
``(A) to `circumvent a technological measure' means to
descramble a scrambled work, to decrypt an encrypted work, or
otherwise to avoid, bypass, remove, deactivate, or impair a
technological measure, without the authority of the copyright
owner; and
``(B) a technological measure `effectively controls access
to a work' if the measure, in the ordinary course of its
operation, requires the application of information, or a
process or a treatment, with the authority of the copyright
owner, to gain access to the work.
``(b) Additional Violations.--(1) No person shall
manufacture, import, offer to the public, provide, or
otherwise traffic in any technology, product, service,
device, component, or part thereof, that--
``(A) is primarily designed or produced for the purpose of
circumventing protection afforded by a technological measure
that effectively protects a right of a copyright owner under
this title in a work or a portion thereof;
``(B) has only limited commercially significant purpose or
use other than to circumvent protection afforded by a
technological measure that effectively protects a right of a
copyright owner under this title in a work or a portion
thereof; or
``(C) is marketed by that person or another acting in
concert with that person with that person's knowledge for use
in circumventing protection afforded by a technological
measure that effectively protects a right of a copyright
owner under this title in a work or a portion thereof.
``(2) As used in this subsection--
``(A) to `circumvent protection afforded by a technological
measure' means avoiding, bypassing, removing, deactivating,
or otherwise impairing a technological measure; and
``(B) a technological measure `effectively protects a right
of a copyright owner under this title' if the measure, in the
ordinary course of its operation, prevents, restricts, or
otherwise limits the exercise of a right of a copyright owner
under this title.
``(c) Other Rights, Etc., Not Affected.--(1) Nothing in
this section shall affect rights, remedies, limitations, or
defenses to copyright infringement, including fair use, under
this title.
``(2) Nothing in this section shall enlarge or diminish
vicarious or contributory liability for copyright
infringement in connection with any technology, product,
service, device, component, or part thereof.
``(3) Nothing in this section shall require that the design
of, or design and selection of parts and components for, a
consumer electronics, telecommunications, or computing
product provide for a response to any particular
technological measure, so long as such part or component, or
the product in which such part or component is integrated,
does not otherwise fall within the prohibitions of subsection
(a)(2) or (b)(1).
``(4) Nothing in this section shall enlarge or diminish any
rights of free speech or the press for activities using
consumer electronics, telecommunications, or computing
products.
``(d) Exemption for Nonprofit Libraries, Archives, and
Educational Institutions.--(1) A nonprofit library, archives,
or educational institution which gains access to a
commercially exploited copyrighted work solely in order to
make a good faith determination of whether to acquire a copy
of that work for the sole purpose of engaging in conduct
permitted under this title shall not be in violation of
subsection (a)(1)(A). A copy of a work to which access has
been gained under this paragraph--
``(A) may not be retained longer than necessary to make
such good faith determination; and
``(B) may not be used for any other purpose.
``(2) The exemption made available under paragraph (1)
shall only apply with respect to a work when an identical
copy of that work is not reasonably available in another
form.
``(3) A nonprofit library, archives, or educational
institution that willfully for the purpose of commercial
advantage or financial gain violates paragraph (1)--
``(A) shall, for the first offense, be subject to the civil
remedies under section 1203; and
``(B) shall, for repeated or subsequent offenses, in
addition to the civil remedies under section 1203, forfeit
the exemption provided under paragraph (1).
``(4) This subsection may not be used as a defense to a
claim under subsection (a)(2) or (b), nor may this subsection
permit a nonprofit library, archives, or educational
institution to manufacture, import, offer to the public,
provide, or otherwise traffic in any technology, product,
service, component, or part thereof, which circumvents a
technological measure.
``(5) In order for a library or archives to qualify for the
exemption under this subsection, the collections of that
library or archives shall be--
``(A) open to the public; or
``(B) available not only to researchers affiliated with the
library or archives or with the institution of which it is a
part, but also to other persons doing research in a
specialized field.
``(e) Law Enforcement, Intelligence, and Other Government
Activities.--This section does not prohibit any lawfully
authorized investigative, protective, information security,
or intelligence activity of an officer, agent, or employee of
the United States, a State, or a political subdivision of a
State, or a person acting pursuant to a contract with the
United States, a State, or a political subdivision of a
State. For purposes of this subsection, the term `information
security' means activities carried out in order to identify
and address the vulnerabilities of a government computer,
computer system, or computer network.
``(f) Reverse Engineering.--(1) Notwithstanding the
provisions of subsection (a)(1)(A), a person who has lawfully
obtained the right to use a copy of a computer program may
circumvent a technological measure that effectively controls
access to a particular portion of that program for the sole
purpose of identifying and analyzing those elements of the
program that are necessary to achieve interoperability of an
independently created computer program with other programs,
and that have not previously been readily available to the
person engaging in the circumvention, to the extent any such
acts of identification and analysis do not constitute
infringement under this title.
``(2) Notwithstanding the provisions of subsections (a)(2)
and (b), a person may develop and employ technological means
to circumvent a technological measure, or to circumvent
protection afforded by a technological measure, in order to
enable the identification and analysis under paragraph (1),
or for the purpose of enabling interoperability of an
independently created computer program with other programs,
if such means are necessary to achieve such interoperability,
to the extent that doing so does not constitute infringement
under this title.
``(3) The information acquired through the acts permitted
under paragraph (1), and the means permitted under paragraph
(2), may be made available to others if the person referred
to in paragraph (1) or (2), as the case may be, provides such
information or means solely for the purpose of enabling
interoperability of an independently created computer program
with other programs, and to the extent that doing so does not
constitute infringement under this title or violate
applicable law other than this section.
``(4) For purposes of this subsection, the term
`interoperability' means the ability of computer programs to
exchange information, and of such programs mutually to use
the information which has been exchanged.
``(g) Encryption Research.--
``(1) Definitions.--For purposes of this subsection--
``(A) the term `encryption research' means activities
necessary to identify and analyze flaws and vulnerabilities
of encryption technologies applied to copyrighted works, if
these activities are conducted to advance the state
of knowledge in the field of encryption technology or to
assist in the development of encryption products; and
``(B) the term `encryption technology' means the scrambling
and descrambling of information using mathematical formulas
or algorithms.
``(2) Permissible acts of encryption research.--
Notwithstanding the provisions of subsection (a)(1)(A), it is
not a violation of that
[[Page H10051]]
subsection for a person to circumvent a technological measure
as applied to a copy, phonorecord, performance, or display of
a published work in the course of an act of good faith
encryption research if--
``(A) the person lawfully obtained the encrypted copy,
phonorecord, performance, or display of the published work;
``(B) such act is necessary to conduct such encryption
research;
``(C) the person made a good faith effort to obtain
authorization before the circumvention; and
``(D) such act does not constitute infringement under this
title or a violation of applicable law other than this
section, including section 1030 of title 18 and those
provisions of title 18 amended by the Computer Fraud and
Abuse Act of 1986.
``(3) Factors in determining exemption.--In determining
whether a person qualifies for the exemption under paragraph
(2), the factors to be considered shall include--
``(A) whether the information derived from the encryption
research was disseminated, and if so, whether it was
disseminated in a manner reasonably calculated to advance the
state of knowledge or development of encryption technology,
versus whether it was disseminated in a manner that
facilitates infringement under this title or a violation of
applicable law other than this section, including a violation
of privacy or breach of security;
``(B) whether the person is engaged in a legitimate course
of study, is employed, or is appropriately trained or
experienced, in the field of encryption technology; and
``(C) whether the person provides the copyright owner of
the work to which the technological measure is applied with
notice of the findings and documentation of the research, and
the time when such notice is provided.
``(4) Use of technological means for research activities.--
Notwithstanding the provisions of subsection (a)(2), it is
not a violation of that subsection for a person to--
``(A) develop and employ technological means to circumvent
a technological measure for the sole purpose of that person
performing the acts of good faith encryption research
described in paragraph (2); and
``(B) provide the technological means to another person
with whom he or she is working collaboratively for the
purpose of conducting the acts of good faith encryption
research described in paragraph (2) or for the purpose of
having that other person verify his or her acts of good faith
encryption research described in paragraph (2).
``(5) Report to congress.--Not later than 1 year after the
date of the enactment of this chapter, the Register of
Copyrights and the Assistant Secretary for Communications and
Information of the Department of Commerce shall jointly
report to the Congress on the effect this subsection has had
on--
``(A) encryption research and the development of encryption
technology;
``(B) the adequacy and effectiveness of technological
measures designed to protect copyrighted works; and
``(C) protection of copyright owners against the
unauthorized access to their encrypted copyrighted works.
The report shall include legislative recommendations, if any.
``(h) Exceptions Regarding Minors.--In applying subsection
(a) to a component or part, the court may consider the
necessity for its intended and actual incorporation in a
technology, product, service, or device, which--
``(1) does not itself violate the provisions of this title;
and
``(2) has the sole purpose to prevent the access of minors
to material on the Internet.
``(i) Protection of Personally Identifying Information.--
(1) Circumvention permitted.--Notwithstanding the
provisions of subsection (a)(1)(A), it is not a violation of
that subsection for a person to circumvent a technological
measure that effectively controls access to a work protected
under this title, if--
``(A) the technological measure, or the work it protects,
contains the capability of collecting or disseminating
personally identifying information reflecting the online
activities of a natural person who seeks to gain access to
the work protected;
``(B) in the normal course of its operation, the
technological measure, or the work it protects, collects or
disseminates personally identifying information about the
person who seeks to gain access to the work protected,
without providing conspicuous notice of such collection or
dissemination to such person, and without providing such
person with the capability to prevent or restrict such
collection or dissemination;
``(C) the act of circumvention has the sole effect of
identifying and disabling the capability described in
subparagraph (A), and has no other effect on the ability of
any person to gain access to any work; and
``(D) the act of circumvention is carried out solely for
the purpose of preventing the collection or dissemination of
personally identifying information about a natural person who
seeks to gain access to the work protected, and is not in
violation of any other law.
``(2) Inapplicability to certain technological measures.--
This subsection does not apply to a technological measure, or
a work it protects, that does not collect or disseminate
personally identifying information and that is disclosed to a
user as not having or using such capability.
``(j) Security Testing.--
``(1) Definition.--For purposes of this subsection, the
term `security testing' means accessing a computer, computer
system, or computer network, solely for the purpose of good
faith testing, investigating, or correcting, a security flaw
or vulnerability, with the authorization of the owner or
operator of such computer, computer system, or computer
network.
``(2) Permissible acts of security testing.--
Notwithstanding the provisions of subsection (a)(1)(A), it is
not a violation of that subsection for a person to engage in
an act of security testing, if such act does not constitute
infringement under this title or a violation of applicable
law other than this section, including section 1030 of title
18 and those provisions of title 18 amended by the Computer
Fraud and Abuse Act of 1986.
``(3) Factors in determining exemption.--In determining
whether a person qualifies for the exemption under paragraph
(2), the factors to be considered shall include--
``(A) whether the information derived from the security
testing was used solely to promote the security of the owner
or operator of such computer, computer system or computer
network, or shared directly with the developer of such
computer, computer system, or computer network; and
``(B) whether the information derived from the security
testing was used or maintained in a manner that does not
facilitate infringement under this title or a violation of
applicable law other than this section, including a violation
of privacy or breach of security.
``(4) Use of technological means for security testing.--
Notwithstanding the provisions of subsection (a)(2), it is
not a violation of that subsection for a person to develop,
produce, distribute or employ technological means for the
sole purpose of performing the acts of security testing
described in subsection (2), provided such technological
means does not otherwise violate section (a)(2).
``(k) Certain Analog Devices and Certain Technological
Measures.--
``(1) Certain analog devices.--
``(A) Effective 18 months after the date of the enactment
of this chapter, no person shall manufacture, import, offer
to the public, provide or otherwise traffic in any--
``(i) VHS format analog video cassette recorder unless such
recorder conforms to the automatic gain control copy control
technology;
``(ii) 8mm format analog video cassette camcorder unless
such camcorder conforms to the automatic gain control
technology;
``(iii) Beta format analog video cassette recorder, unless
such recorder conforms to the automatic gain control copy
control technology, except that this requirement shall not
apply until there are 1,000 Beta format analog video cassette
recorders sold in the United States in any one calendar year
after the date of the enactment of this chapter;
``(iv) 8mm format analog video cassette recorder that is
not an analog video cassette camcorder, unless such recorder
conforms to the automatic gain control copy control
technology, except that this requirement shall not apply
until there are 20,000 such recorders sold in the United
States in any one calendar year after the date of the
enactment of this chapter; or
``(v) analog video cassette recorder that records using an
NTSC format video input and that is not otherwise covered
under clauses (i) through (iv), unless such device conforms
to the automatic gain control copy control technology.
``(B) Effective on the date of the enactment of this
chapter, no person shall manufacture, import, offer to the
public, provide or otherwise traffic in--
``(i) any VHS format analog video cassette recorder or any
8mm format analog video cassette recorder if the design of
the model of such recorder has been modified after such date
of enactment so that a model of recorder that previously
conformed to the automatic gain control copy control
technology no longer conforms to such technology; or
``(ii) any VHS format analog video cassette recorder, or
any 8mm format analog video cassette recorder that is not an
8mm analog video cassette camcorder, if the design of the
model of such recorder has been modified after such date of
enactment so that a model of recorder that previously
conformed to the four-line colorstripe copy control
technology no longer conforms to such technology.
Manufacturers that have not previously manufactured or sold a
VHS format analog video cassette recorder, or an 8mm format
analog cassette recorder, shall be required to conform to the
four-line colorstripe copy control technology in the initial
model of any such recorder manufactured after the date of the
enactment of this chapter, and thereafter to continue
conforming to the four-line colorstripe copy control
technology. For purposes of this subparagraph, an analog
video cassette recorder `conforms to' the four-line
colorstripe copy control technology if it records a signal
that, when played back by the playback function of that
recorder in the normal viewing mode, exhibits, on a
reference display device, a display containing distracting
visible lines through portions of the viewable picture.
``(2) Certain encoding restrictions.--No person shall apply
the automatic gain control copy control technology or
colorstripe copy control technology to prevent or limit
consumer copying except such copying--
``(A) of a single transmission, or specified group of
transmissions, of live events or of audiovisual works for
which a member of the public has exercised choice in
selecting the transmissions, including the content of the
transmissions or the time of receipt of such transmissions,
or both, and as to which such member is charged a separate
fee for each such transmission or specified group of
transmissions;
``(B) from a copy of a transmission of a live event or an
audiovisual work if such transmission is provided by a
channel or service where payment is made by a member of the
public for such channel or service in the form of a
subscription fee that entitles the member of the public to
receive all of the programming contained in such channel or
service;
[[Page H10052]]
``(C) from a physical medium containing one or more
prerecorded audiovisual works; or
``(D) from a copy of a transmission described in
subparagraph (A) or from a copy made from a physical medium
described in subparagraph (C).
In the event that a transmission meets both the conditions
set forth in subparagraph (A) and those set forth in
subparagraph (B), the transmission shall be treated as a
transmission described in subparagraph (A).
``(3) Inapplicability.--This subsection shall not--
``(A) require any analog video cassette camcorder to
conform to the automatic gain control copy control technology
with respect to any video signal received through a camera
lens;
``(B) apply to the manufacture, importation, offer for
sale, provision of, or other trafficking in, any professional
analog video cassette recorder; or
``(C) apply to the offer for sale or provision of, or other
trafficking in, any previously owned analog video cassette
recorder, if such recorder was legally manufactured and sold
when new and not subsequently modified in violation of
paragraph (1)(B).
``(4) Definitions.--For purposes of this subsection:
``(A) An `analog video cassette recorder' means a device
that records, or a device that includes a function that
records, on electromagnetic tape in an analog format the
electronic impulses produced by the video and audio portions
of a television program, motion picture, or other form of
audiovisual work.
``(B) An `analog video cassette camcorder' means an analog
video cassette recorder that contains a recording function
that operates through a camera lens and through a video input
that may be connected with a television or other video
playback device.
``(C) An analog video cassette recorder `conforms' to the
automatic gain control copy control technology if it--
``(i) detects one or more of the elements of such
technology and does not record the motion picture or
transmission protected by such technology; or
``(ii) records a signal that, when played back, exhibits a
meaningfully distorted or degraded display.
``(D) The term `professional analog video cassette
recorder' means an analog video cassette recorder that is
designed, manufactured, marketed, and intended for use by a
person who regularly employs such a device for a lawful
business or industrial use, including making, performing,
displaying, distributing, or transmitting copies of motion
pictures on a commercial scale.
``(E) The terms `VHS format,' `8mm format,' `Beta format,'
`automatic gain control copy control technology,'
`colorstripe copy control technology,' `four-line version of
the colorstripe copy control technology,' and `NTSC' have the
meanings that are commonly understood in the consumer
electronics and motion picture industries as of the date of
the enactment of this chapter.
``(5) Violations.--Any violation of paragraph (1) of this
subsection shall be treated as a violation of subsection
(b)(1) of this section. Any violation of paragraph (2) of
this subsection shall be deemed an `act of circumvention' for
the purposes of section 1203(c)(3)(A) of this chapter.
``Sec. 1202. Integrity of copyright management information
``(a) False Copyright Management Information.--No person
shall knowingly and with the intent to induce, enable,
facilitate, or conceal infringement--
``(1) provide copyright management information that is
false, or
``(2) distribute or import for distribution copyright
management information that is false.
``(b) Removal or Alteration of Copyright Management
Information.--No person shall, without the authority of the
copyright owner or the law--
``(1) intentionally remove or alter any copyright
management information,
``(2) distribute or import for distribution copyright
management information knowing that the copyright management
information has been removed or altered without authority of
the copyright owner or the law, or
``(3) distribute, import for distribution, or publicly
perform works, copies of works, or phonorecords, knowing that
copyright management information has been removed or altered
without authority of the copyright owner or the law,
knowing, or, with respect to civil remedies under section
1203, having reasonable grounds to know, that it will induce,
enable, facilitate, or conceal an infringement of any right
under this title.
``(c) Definition.--As used in this section, the term
`copyright management information' means any of the following
information conveyed in connection with copies or
phonorecords of a work or performances or displays of a work,
including in digital form, except that such term does not
include any personally identifying information about a user
of a work or of a copy, phonorecord, performance, or display
of a work:
``(1) The title and other information identifying the work,
including the information set forth on a notice of copyright.
``(2) The name of, and other identifying information about,
the author of a work.
``(3) The name of, and other identifying information about,
the copyright owner of the work, including the information
set forth in a notice of copyright.
``(4) With the exception of public performances of works by
radio and television broadcast stations, the name of, and
other identifying information about, a performer whose
performance is fixed in a work other than an audiovisual
work.
``(5) With the exception of public performances of works by
radio and television broadcast stations, in the case of an
audiovisual work, the name of, and other identifying
information about, a writer, performer, or director who is
credited in the audiovisual work.
``(6) Terms and conditions for use of the work.
``(7) Identifying numbers or symbols referring to such
information or links to such information.
``(8) Such other information as the Register of Copyrights
may prescribe by regulation, except that the Register of
Copyrights may not require the provision of any information
concerning the user of a copyrighted work.
``(d) Law Enforcement, Intelligence, and Other Government
Activities.--This section does not prohibit any lawfully
authorized investigative, protective, information security,
or intelligence activity of an officer, agent, or employee of
the United States, a State, or a political subdivision of a
State, or a person acting pursuant to a contract with the
United States, a State, or a political subdivision of a
State. For purposes of this subsection, the term `information
security' means activities carried out in order to identify
and address the vulnerabilities of a government computer,
computer system, or computer network.
``(e) Limitations on Liability.--
``(1) Analog transmissions.--In the case of an analog
transmission, a person who is making transmissions in its
capacity as a broadcast station, or as a cable system, or
someone who provides programming to such station or system,
shall not be liable for a violation of subsection (b) if--
``(A) avoiding the activity that constitutes such violation
is not technically feasible or would create an undue
financial hardship on such person; and
``(B) such person did not intend, by engaging in such
activity, to induce, enable, facilitate, or conceal
infringement of a right under this title.
``(2) Digital transmissions.--
``(A) If a digital transmission standard for the placement
of copyright management information for a category of works
is set in a voluntary, consensus standard-setting process
involving a representative cross-section of broadcast
stations or cable systems and copyright owners of a category
of works that are intended for public performance by such
stations or systems, a person identified in paragraph (1)
shall not be liable for a violation of subsection (b) with
respect to the particular copyright management information
addressed by such standard if--
``(i) the placement of such information by someone other
than such person is not in accordance with such standard; and
``(ii) the activity that constitutes such violation is not
intended to induce, enable, facilitate, or conceal
infringement of a right under this title.
``(B) Until a digital transmission standard has been set
pursuant to subparagraph (A) with respect to the placement of
copyright management information for a category or works, a
person identified in paragraph (1) shall not be liable for a
violation of subsection (b) with respect to such copyright
management information, if the activity that constitutes such
violation is not intended to induce, enable, facilitate, or
conceal infringement of a right under this title, and if--
``(i) the transmission of such information by such person
would result in a perceptible visual or aural degradation of
the digital signal; or
``(ii) the transmission of such information by such person
would conflict with--
``(I) an applicable government regulation relating to
transmission of information in a digital signal;
``(II) an applicable industry-wide standard relating to the
transmission of information in a digital signal that was
adopted by a voluntary consensus standards body prior to the
effective date of this chapter; or
``(III) an applicable industry-wide standard relating to
the transmission of information in a digital signal that was
adopted in a voluntary, consensus standards-setting process
open to participation by a representative cross-section of
broadcast stations or cable systems and copyright owners of a
category of works that are intended for public performance by
such stations or systems.
``(3) Definitions.--As used in this subsection--
``(A) the term `broadcast station' has the meaning given
that term in section 3 of the Communications Act of 1934 (47
U.S.C. 153)); and
``(B) the term `cable system' has the meaning given that
term in section 602 of the Communications Act of 1934 (47
U.S.C. 522)).
``Sec. 1203. Civil remedies
``(a) Civil Actions.--Any person injured by a violation of
section 1201 or 1202 may bring a civil action in an
appropriate United States district court for such violation.
``(b) Powers of the Court.--In an action brought under
subsection (a), the court--
``(1) may grant temporary and permanent injunctions on such
terms as it deems reasonable to prevent or restrain a
violation, but in no event shall impose a prior restraint on
free speech or the press protected under the 1st amendment to
the Constitution;
``(2) at any time while an action is pending, may order the
impounding, on such terms as it deems reasonable, of any
device or product that is in the custody or control of the
alleged violator and that the court has reasonable cause to
believe was involved in a violation;
``(3) may award damages under subsection (c);
``(4) in its discretion may allow the recovery of costs by
or against any party other than the United States or an
officer thereof;
``(5) in its discretion may award reasonable attorney's
fees to the prevailing party; and
``(6) may, as part of a final judgment or decree finding a
violation, order the remedial modification or the destruction
of any device or product
[[Page H10053]]
involved in the violation that is in the custody or control
of the violator or has been impounded under paragraph (2).
``(c) Award of Damages.--
``(1) In general.--Except as otherwise provided in this
title, a person committing a violation of section 1201 or
1202 is liable for either--
``(A) the actual damages and any additional profits of the
violator, as provided in paragraph (2), or
``(B) statutory damages, as provided in paragraph (3).
``(2) Actual damages.--The court shall award to the
complaining party the actual damages suffered by the party as
a result of the violation, and any profits of the violator
that are attributable to the violation and are not taken into
account in computing the actual damages, if the complaining
party elects such damages at any time before final judgment
is entered.
``(3) Statutory damages.--(A) At any time before final
judgment is entered, a complaining party may elect to recover
an award of statutory damages for each violation of section
1201 in the sum of not less than $200 or more than $2,500 per
act of circumvention, device, product, component, offer, or
performance of service, as the court considers just.
``(B) At any time before final judgment is entered, a
complaining party may elect to recover an award of statutory
damages for each violation of section 1202 in the sum of not
less than $2,500 or more than $25,000.
``(4) Repeated violations.--In any case in which the
injured party sustains the burden of proving, and the court
finds, that a person has violated section 1201 or 1202 within
three years after a final judgment was entered against the
person for another such violation, the court may increase the
award of damages up to triple the amount that would otherwise
be awarded, as the court considers just.
``(5) Innocent violations.--
``(A) In general.--The court in its discretion may reduce
or remit the total award of damages in any case in which the
violator sustains the burden of proving, and the court finds,
that the violator was not aware and had no reason to believe
that its acts constituted a violation.
``(B) Nonprofit library, archives, or educational
institutions.--In the case of a nonprofit library, archives,
or educational institution, the court shall remit damages in
any case in which the library, archives, or educational
institution sustains the burden of proving, and the court
finds, that the library, archives, or educational institution
was not aware and had no reason to believe that its acts
constituted a violation.
``Sec. 1204. Criminal offenses and penalties
``(a) In General.--Any person who violates section 1201 or
1202 willfully and for purposes of commercial advantage or
private financial gain--
``(1) shall be fined not more than $500,000 or imprisoned
for not more than 5 years, or both, for the first offense;
and
``(2) shall be fined not more than $1,000,000 or imprisoned
for not more than 10 years, or both, for any subsequent
offense.
``(b) Limitation for Nonprofit Library, Archives, or
Educational Institution.--Subsection (a) shall not apply to a
nonprofit library, archives, or educational institution.
``(c) Statute of Limitations.--No criminal proceeding shall
be brought under this section unless such proceeding is
commenced within five years after the cause of action arose.
``Sec. 1205. Savings clause
``Nothing in this chapter abrogates, diminishes, or weakens
the provisions of, nor provides any defense or element of
mitigation in a criminal prosecution or civil action under,
any Federal or State law that prevents the violation of the
privacy of an individual in connection with the individual's
use of the Internet.''.
(b) Conforming amendment.--The table of chapters for title
17, United States Code, is amended by adding after the item
relating to chapter 11 the following:
``12. Copyright Protection and Management Systems...........1201''.....
SEC. 104. EVALUATION OF IMPACT OF COPYRIGHT LAW AND
AMENDMENTS ON ELECTRONIC COMMERCE AND
TECHNOLOGICAL DEVELOPMENT.
(a) Evaluation by the Register of Copyrights and the
Assistant Secretary for Communications and Information.--The
Register of Copyrights and the Assistant Secretary for
Communications and Information of the Department of Commerce
shall jointly evaluate--
(1) the effects of the amendments made by this title and
the development of electronic commerce and associated
technology on the operation of sections 109 and 117 of title
17, United States Code; and
(2) the relationship between existing and emergent
technology and the operation of sections 109 and 117 of title
17, United States Code.
(b) Report to Congress.--The Register of Copyrights and the
Assistant Secretary for Communications and Information of the
Department of Commerce shall, not later than 24 months after
the date of the enactment of this Act, submit to the Congress
a joint report on the evaluation conducted under subsection
(a), including any legislative recommendations the Register
and the Assistant Secretary may have.
SEC. 105. EFFECTIVE DATE.
(a) In General.--Except as otherwise provided in this
title, this title and the amendments made by this title shall
take effect on the date of the enactment of this Act.
(b) Amendments Relating to Certain International
Agreements.--(1) The following shall take effect upon the
entry into force of the WIPO Copyright Treaty with respect to
the United States:
(A) Paragraph (5) of the definition of ``international
agreement'' contained in section 101 of title 17, United
States Code, as amended by section 102(a)(4) of this Act.
(B) The amendment made by section 102(a)(6) of this Act.
(C) Subparagraph (C) of section 104A(h)(1) of title 17,
United States Code, as amended by section 102(c)(1) of this
Act.
(D) Subparagraph (C) of section 104A(h)(3) of title 17,
United States Code, as amended by section 102(c)(2) of this
Act.
(2) The following shall take effect upon the entry into
force of the WIPO Performances and Phonograms Treaty with
respect to the United States:
(A) Paragraph (6) of the definition of ``international
agreement'' contained in section 101 of title 17, United
States Code, as amended by section 102(a)(4) of this Act.
(B) The amendment made by section 102(a)(7) of this Act.
(C) The amendment made by section 102(b)(2) of this Act.
(D) Subparagraph (D) of section 104A(h)(1) of title 17,
United States Code, as amended by section 102(c)(1) of this
Act.
(E) Subparagraph (D) of section 104A(h)(3) of title 17,
United States Code, as amended by section 102(c)(2) of this
Act.
(F) The amendments made by section 102(c)(3) of this Act.
TITLE II--ONLINE COPYRIGHT INFRINGEMENT LIABILITY LIMITATION
SEC. 201. SHORT TITLE.
This title may be cited as the ``Online Copyright
Infringement Liability Limitation Act''.
SEC. 202. LIMITATIONS ON LIABILITY FOR COPYRIGHT
INFRINGEMENT.
(a) In General.--Chapter 5 of title 17, United States Code,
is amended by adding after section 511 the following new
section:
``Sec. 512. Limitations on liability relating to material
online
``(a) Transitory Digital Network Communications.--A service
provider shall not be liable for monetary relief, or, except
as provided in subsection (j), for injunctive or other
equitable relief, for infringement of copyright by reason of
the provider's transmitting, routing, or providing
connections for, material through a system or network
controlled or operated by or for the service provider, or by
reason of the intermediate and transient storage of that
material in the course of such transmitting, routing, or
providing connections, if--
``(1) the transmission of the material was initiated by or
at the direction of a person other than the service provider;
``(2) the transmission, routing, provision of connections,
or storage is carried out through an automatic technical
process without selection of the material by the service
provider;
``(3) the service provider does not select the recipients
of the material except as an automatic response to the
request of another person;
``(4) no copy of the material made by the service provider
in the course of such intermediate or transient storage is
maintained on the system or network in a manner ordinarily
accessible to anyone other than anticipated recipients, and
no such copy is maintained on the system or network in a
manner ordinarily accessible to such anticipated recipients
for a longer period than is reasonably necessary for the
transmission, routing, or provision of connections; and
``(5) the material is transmitted through the system or
network without modification of its content.
``(b) System Caching.--
``(1) Limitation on liability.--A service provider shall
not be liable for monetary relief, or, except as provided in
subsection (j), for injunctive or other equitable relief, for
infringement of copyright by reason of the intermediate and
temporary storage of material on a system or network
controlled or operated by or for the service provider in a
case in which--
``(A) the material is made available online by a person
other than the service provider,
``(B) the material is transmitted from the person described
in subparagraph (A) through the system or network to a person
other than the person described in subparagraph (A) at the
direction of that other person, and
``(C) the storage is carried out through an automatic
technical process for the purpose of making the material
available to users of the system or network who, after the
material is transmitted as described in subparagraph (B),
request access to the material from the person described in
subparagraph (A),
if the conditions set forth in paragraph (2) are met.
(2) Conditions.--The conditions referred to in paragraph
(1) are that--
``(A) the material described in paragraph (1) is
transmitted to the subsequent users described in paragraph
(1)(C) without modification to its content from the manner in
which the material was transmitted from the person described
in paragraph (1)(A);
``(B) the service provider described in paragraph (1)
complies with rules concerning the refreshing, reloading, or
other updating of the material when specified by the person
making the material available online in accordance with a
generally accepted industry standard data communications
protocol for the system or network through which that person
makes the material available, except that this subparagraph
applies only if those rules are not used by the person
described in paragraph (1)(A) to prevent or unreasonably
impair the intermediate storage to which this subsection
applies;
``(C) the service provider does not interfere with the
ability of technology associated with the material to return
to the person described in paragraph (1)(A) the information
that would have been available to that person if the material
had been obtained by the subsequent users described in
paragraph (1)(C) directly from that person, except that
this subparagraph applies only if that technology--
[[Page H10054]]
``(i) does not significantly interfere with the performance
of the provider's system or network or with the intermediate
storage of the material;
``(ii) is consistent with generally accepted industry
standard communications protocols; and
``(iii) does not extract information from the provider's
system or network other than the information that would have
been available to the person described in paragraph (1)(A) if
the subsequent users had gained access to the material
directly from that person;
``(D) if the person described in paragraph (1)(A) has in
effect a condition that a person must meet prior to having
access to the material, such as a condition based on payment
of a fee or provision of a password or other information, the
service provider permits access to the stored material in
significant part only to users of its system or network that
have met those conditions and only in accordance with those
conditions; and
``(E) if the person described in paragraph (1)(A) makes
that material available online without the authorization of
the copyright owner of the material, the service provider
responds expeditiously to remove, or disable access to, the
material that is claimed to be infringing upon notification
of claimed infringement as described in subsection (c)(3),
except that this subparagraph applies only if--
``(i) the material has previously been removed from the
originating site or access to it has been disabled, or a
court has ordered that the material be removed from the
originating site or that access to the material on the
originating site be disabled; and
``(ii) the party giving the notification includes in the
notification a statement confirming that the material has
been removed from the originating site or access to it has
been disabled or that a court has ordered that the material
be removed from the originating site or that access to the
material on the originating site be disabled.
``(c) Information Residing on Systems or Networks At
Direction of Users.--
``(1) In general.--A service provider shall not be liable
for monetary relief, or, except as provided in subsection
(j), for injunctive or other equitable relief, for
infringement of copyright by reason of the storage at the
direction of a user of material that resides on a system or
network controlled or operated by or for the service
provider, if the service provider--
``(A)(i) does not have actual knowledge that the material
or an activity using the material on the system or network is
infringing;
``(ii) in the absence of such actual knowledge, is not
aware of facts or circumstances from which infringing
activity is apparent; or
``(iii) upon obtaining such knowledge or awareness, acts
expeditiously to remove, or disable access to, the material;
``(B) does not receive a financial benefit directly
attributable to the infringing activity, in a case in which
the service provider has the right and ability to control
such activity; and
``(C) upon notification of claimed infringement as
described in paragraph (3), responds expeditiously to remove,
or disable access to, the material that is claimed to be
infringing or to be the subject of infringing activity.
``(2) Designated agent.--The limitations on liability
established in this subsection apply to a service provider
only if the service provider has designated an agent to
receive notifications of claimed infringement described in
paragraph (3), by making available through its service,
including on its website in a location accessible to the
public, and by providing to the Copyright Office,
substantially the following information:
``(A) the name, address, phone number, and electronic mail
address of the agent.
``(B) other contact information which the Register of
Copyrights may deem appropriate.
The Register of Copyrights shall maintain a current directory
of agents available to the public for inspection, including
through the Internet, in both electronic and hard copy
formats, and may require payment of a fee by service
providers to cover the costs of maintaining the directory.
``(3) Elements of notification.--
``(A) To be effective under this subsection, a notification
of claimed infringement must be a written communication
provided to the designated agent of a service provider that
includes substantially the following:
``(i) A physical or electronic signature of a person
authorized to act on behalf of the owner of an exclusive
right that is allegedly infringed.
``(ii) Identification of the copyrighted work claimed to
have been infringed, or, if multiple copyrighted works at a
single online site are covered by a single notification, a
representative list of such works at that site.
``(iii) Identification of the material that is claimed to
be infringing or to be the subject of infringing activity and
that is to be removed or access to which is to be disabled,
and information reasonably sufficient to permit the service
provider to locate the material.
``(iv) Information reasonably sufficient to permit the
service provider to contact the complaining party, such as an
address, telephone number, and, if available, an electronic
mail address at which the complaining party may be contacted.
``(v) A statement that the complaining party has a good
faith belief that use of the material in the manner
complained of is not authorized by the copyright owner, its
agent, or the law.
``(vi) A statement that the information in the notification
is accurate, and under penalty of perjury, that the
complaining party is authorized to act on behalf of the owner
of an exclusive right that is allegedly infringed.
``(B)(i) Subject to clause (ii), a notification from a
copyright owner or from a person authorized to act on behalf
of the copyright owner that fails to comply substantially
with the provisions of subparagraph (A) shall not be
considered under paragraph (1)(A) in determining whether a
service provider has actual knowledge or is aware of facts or
circumstances from which infringing activity is apparent.
``(ii) In a case in which the notification that is provided
to the service provider's designated agent fails to comply
substantially with all the provisions of subparagraph (A) but
substantially complies with clauses (ii), (iii), and (iv) of
subparagraph (A), clause (i) of this subparagraph applies
only if the service provider promptly attempts to contact the
person making the notification or takes other reasonable
steps to assist in the receipt of notification that
substantially complies with all the provisions of
subparagraph (A).
``(d) Information Location Tools.--A service provider shall
not be liable for monetary relief, or, except as provided in
subsection (j), for injunctive or other equitable relief, for
infringement of copyright by reason of the provider referring
or linking users to an online location containing infringing
material or infringing activity, by using information
location tools, including a directory, index, reference,
pointer, or hypertext link, if the service provider--
``(1)(A) does not have actual knowledge that the material
or activity is infringing;
``(B) in the absence of such actual knowledge, is not aware
of facts or circumstances from which infringing activity is
apparent; or
``(C) upon obtaining such knowledge or awareness, acts
expeditiously to remove, or disable access to, the material;
``(2) does not receive a financial benefit directly
attributable to the infringing activity, in a case in which
the service provider has the right and ability to control
such activity; and
``(3) upon notification of claimed infringement as
described in subsection (c)(3), responds expeditiously to
remove, or disable access to, the material that is claimed to
be infringing or to be the subject of infringing activity,
except that, for purposes of this paragraph, the information
described in subsection (c)(3)(A)(iii) shall be
identification of the reference or link, to material or
activity claimed to be infringing, that is to be removed or
access to which is to be disabled, and information reasonably
sufficient to permit the service provider to locate that
reference or link.
``(e) Limitation on liability of nonprofit educational
institutions.--(1) When a public or other nonprofit
institution of higher education is a service provider, and
when a faculty member or graduate student who is an employee
of such institution is performing a teaching or research
function, for the purposes of subsections (a) and (b) such
faculty member or graduate student shall be considered to be
a person other than the institution, and for the purposes of
subsections (c) and (d) such faculty member's or graduate
student's knowledge or awareness of his or her infringing
activities shall not be attributed to the institution, if--
``(A) such faculty member's or graduate student's
infringing activities do not involve the provision of online
access to instructional materials that are or were required
or recommended, within the preceding 3-year period, for a
course taught at the institution by such faculty member or
graduate student;
``(B) the institution has not, within the preceding 3-year
period, received more than 2 notifications described in
subsection (c)(3) of claimed infringement by such faculty
member or graduate student, and such notifications of claimed
infringement were not actionable under subsection (f); and
``(C) the institution provides to all users of its system
or network informational materials that accurately describe,
and promote compliance with, the laws of the United States
relating to copyright.
``(2) Injunctions.--For the purposes of this subsection,
the limitations on injunctive relief contained in subsections
(j)(2) and (j)(3), but not those in (j)(1), shall apply.
``(f) Misrepresentations.--Any person who knowingly
materially misrepresents under this section--
``(1) that material or activity is infringing, or
``(2) that material or activity was removed or disabled by
mistake or misidentification,
shall be liable for any damages, including costs and
attorneys' fees, incurred by the alleged infringer, by any
copyright owner or copyright owner's authorized licensee, or
by a service provider, who is injured by such
misrepresentation, as the result of the service provider
relying upon such misrepresentation in removing or disabling
access to the material or activity claimed to be infringing,
or in replacing the removed material or ceasing to disable
access to it.
``(g) Replacement of Removed or Disabled Material and
Limitation on Other Liability.--
``(1) No liability for taking down generally.--Subject to
paragraph (2), a service provider shall not be liable to any
person for any claim based on the service provider's good
faith disabling of access to, or removal of, material or
activity claimed to be infringing or based on facts or
circumstances from which infringing activity is apparent,
regardless of whether the material or activity is ultimately
determined to be infringing.
``(2) Exception.--Paragraph (1) shall not apply with
respect to material residing at the direction of a subscriber
of the service provider on a system or network controlled or
operated by or for the service provider that is removed, or
to which access is disabled by the service provider, pursuant
to a notice provided under subsection (c)(1)(C), unless the
service provider--
``(A) takes reasonable steps promptly to notify the
subscriber that it has removed or disabled access to the
material;
``(B) upon receipt of a counter notification described in
paragraph (3), promptly provides the
[[Page H10055]]
person who provided the notification under subsection
(c)(1)(C) with a copy of the counter notification, and
informs that person that it will replace the removed material
or cease disabling access to it in 10 business days; and
``(C) replaces the removed material and ceases disabling
access to it not less than 10, nor more than 14, business
days following receipt of the counter notice, unless its
designated agent first receives notice from the person
who submitted the notification under subsection (c)(1)(C)
that such person has filed an action seeking a court order
to restrain the subscriber from engaging in infringing
activity relating to the material on the service
provider's system or network.
``(3) Contents of counter notification.--To be effective
under this subsection, a counter notification must be a
written communication provided to the service provider's
designated agent that includes substantially the following:
``(A) A physical or electronic signature of the subscriber.
``(B) Identification of the material that has been removed
or to which access has been disabled and the location at
which the material appeared before it was removed or access
to it was disabled.
``(C) A statement under penalty of perjury that the
subscriber has a good faith belief that the material was
removed or disabled as a result of mistake or
misidentification of the material to be removed or disabled.
``(D) The subscriber's name, address, and telephone number,
and a statement that the subscriber consents to the
jurisdiction of Federal District Court for the judicial
district in which the address is located, or if the
subscriber's address is outside of the United States, for any
judicial district in which the service provider may be found,
and that the subscriber will accept service of process from
the person who provided notification under subsection
(c)(1)(C) or an agent of such person.
``(4) Limitation on other liability.--A service provider's
compliance with paragraph (2) shall not subject the service
provider to liability for copyright infringement with respect
to the material identified in the notice provided under
subsection (c)(1)(C).
``(h) Subpoena To Identify Infringer.--
``(1) Request.--A copyright owner or a person authorized to
act on the owner's behalf may request the clerk of any United
States district court to issue a subpoena to a service
provider for identification of an alleged infringer in
accordance with this subsection.
``(2) Contents of request.--The request may be made by
filing with the clerk--
``(A) a copy of a notification described in subsection
(c)(3)(A);
``(B) a proposed subpoena; and
``(C) a sworn declaration to the effect that the purpose
for which the subpoena is sought is to obtain the identity of
an alleged infringer and that such information will only be
used for the purpose of protecting rights under this title.
``(3) Contents of subpoena.--The subpoena shall authorize
and order the service provider receiving the notification and
the subpoena to expeditiously disclose to the copyright owner
or person authorized by the copyright owner information
sufficient to identify the alleged infringer of the material
described in the notification to the extent such information
is available to the service provider.
``(4) Basis for granting subpoena.--If the notification
filed satisfies the provisions of subsection (c)(3)(A), the
proposed subpoena is in proper form, and the accompanying
declaration is properly executed, the clerk shall
expeditiously issue and sign the proposed subpoena and return
it to the requester for delivery to the service provider.
``(5) Actions of service provider receiving subpoena.--Upon
receipt of the issued subpoena, either accompanying or
subsequent to the receipt of a notification described in
subsection (c)(3)(A), the service provider shall
expeditiously disclose to the copyright owner or person
authorized by the copyright owner the information required by
the subpoena, notwithstanding any other provision of law and
regardless of whether the service provider responds to the
notification.
``(6) Rules applicable to subpoena.--Unless otherwise
provided by this section or by applicable rules of the court,
the procedure for issuance and delivery of the subpoena, and
the remedies for noncompliance with the subpoena, shall be
governed to the greatest extent practicable by those
provisions of the Federal Rules of Civil Procedure governing
the issuance, service, and enforcement of a subpoena duces
tecum.
``(i) Conditions for Eligibility.--
``(1) Accommodation of technology.--The limitations on
liability established by this section shall apply to a
service provider only if the service provider--
``(A) has adopted and reasonably implemented, and informs
subscribers and account holders of the service provider's
system or network of, a policy that provides for the
termination in appropriate circumstances of subscribers and
account holders of the service provider's system or network
who are repeat infringers; and
``(B) accommodates and does not interfere with standard
technical measures.
``(2) Definition.--As used in this subsection, the term
`standard technical measures' means technical measures that
are used by copyright owners to identify or protect
copyrighted works and--
``(A) have been developed pursuant to a broad consensus of
copyright owners and service providers in an open, fair,
voluntary, multi-industry standards process;
``(B) are available to any person on reasonable and
nondiscriminatory terms; and
``(C) do not impose substantial costs on service providers
or substantial burdens on their systems or networks.
``(j) Injunctions.--The following rules shall apply in the
case of any application for an injunction under section 502
against a service provider that is not subject to monetary
remedies under this section:
``(1) Scope of relief.--(A) With respect to conduct other
than that which qualifies for the limitation on remedies set
forth in subsection (a), the court may grant injunctive
relief with respect to a service provider only in one or more
of the following forms:
``(i) An order restraining the service provider from
providing access to infringing material or activity residing
at a particular online site on the provider's system or
network.
``(ii) An order restraining the service provider from
providing access to a subscriber or account holder of the
service provider's system or network who is engaging in
infringing activity and is identified in the order, by
terminating the accounts of the subscriber or account holder
that are specified in the order.
``(iii) Such other injunctive relief as the court may
consider necessary to prevent or restrain infringement of
copyrighted material specified in the order of the court at a
particular online location, if such relief is the least
burdensome to the service provider among the forms of relief
comparably effective for that purpose.
``(B) If the service provider qualifies for the limitation
on remedies described in subsection (a), the court may only
grant injunctive relief in one or both of the following
forms:
``(i) An order restraining the service provider from
providing access to a subscriber or account holder of the
service provider's system or network who is using the
provider's service to engage in infringing activity and is
identified in the order, by terminating the accounts of the
subscriber or account holder that are specified in the order.
``(ii) An order restraining the service provider from
providing access, by taking reasonable steps specified in the
order to block access, to a specific, identified, online
location outside the United States.
``(2) Considerations.--The court, in considering the
relevant criteria for injunctive relief under applicable law,
shall consider--
``(A) whether such an injunction, either alone or in
combination with other such injunctions issued against the
same service provider under this subsection, would
significantly burden either the provider or the operation of
the provider's system or network;
``(B) the magnitude of the harm likely to be suffered by
the copyright owner in the digital network environment if
steps are not taken to prevent or restrain the infringement;
``(C) whether implementation of such an injunction would be
technically feasible and effective, and would not interfere
with access to noninfringing material at other online
locations; and
``(D) whether other less burdensome and comparably
effective means of preventing or restraining access to the
infringing material are available.
``(3) Notice and Ex Parte Orders.--Injunctive relief under
this subsection shall be available only after notice to the
service provider and an opportunity for the service provider
to appear are provided, except for orders ensuring the
preservation of evidence or other orders having no material
adverse effect on the operation of the service provider's
communications network.
``(k) Definitions.--
``(1) Service provider.--(A) As used in subsection (a), the
term `service provider' means an entity offering the
transmission, routing, or providing of connections for
digital online communications, between or among points
specified by a user, of material of the user's choosing,
without modification to the content of the material as sent
or received.
``(B) As used in this section, other than subsection (a),
the term `service provider' means a provider of online
services or network access, or the operator of facilities
therefor, and includes an entity described in subparagraph
(A).
``(2) Monetary relief.--As used in this section, the term
`monetary relief' means damages, costs, attorneys' fees, and
any other form of monetary payment.
``(l) Other Defenses Not Affected.--The failure of a
service provider's conduct to qualify for limitation of
liability under this section shall not bear adversely upon
the consideration of a defense by the service provider that
the service provider's conduct is not infringing under this
title or any other defense.
``(m) Protection of Privacy.--Nothing in this section shall
be construed to condition the applicability of subsections
(a) through (d) on--
``(1) a service provider monitoring its service or
affirmatively seeking facts indicating infringing activity,
except to the extent consistent with a standard technical
measure complying with the provisions of subsection (i); or
``(2) a service provider gaining access to, removing, or
disabling access to material in cases in which such conduct
is prohibited by law.
``(n) Construction.--Subsections (a), (b), (c), and (d)
describe separate and distinct functions for purposes of
applying this section. Whether a service provider qualifies
for the limitation on liability in any one of those
subsections shall be based solely on the criteria in that
subsection, and shall not affect a determination of whether
that service provider qualifies for the limitations on
liability under any other such subsection.''.
(b) Conforming Amendment.--The table of sections for
chapter 5 of title 17, United States Code, is amended by
adding at the end the following:
``512. Limitations on liability relating to material online.''.
SEC. 203. EFFECTIVE DATE.
This title and the amendments made by this title shall take
effect on the date of the enactment of this Act.
[[Page H10056]]
TITLE III-COMPUTER MAINTENANCE OR REPAIR COPYRIGHT EXEMPTION
SEC. 301. SHORT TITLE.
This title may be cited as the ``Computer Maintenance
Competition Assurance Act''.
SEC. 302. LIMITATIONS ON EXCLUSIVE RIGHTS; COMPUTER PROGRAMS.
Section 117 of title 17, United States Code, is amended--
(1) by striking ``Notwithstanding'' and inserting the
following:
``(a) Making of Additional Copy or Adaptation by Owner of
Copy.--Notwithstanding'';
(2) by striking ``Any exact'' and inserting the following:
``(b) Lease, Sale, or Other Transfer of Additional Copy or
Adaptation.--Any exact''; and
(3) by adding at the end the following:
``(c) Machine Maintenance or Repair.--Notwithstanding the
provisions of section 106, it is not an infringement for the
owner or lessee of a machine to make or authorize the making
of a copy of a computer program if such copy is made solely
by virtue of the activation of a machine that lawfully
contains an authorized copy of the computer program, for
purposes only of maintenance or repair of that machine, if--
``(1) such new copy is used in no other manner and is
destroyed immediately after the maintenance or repair is
completed; and
``(2) with respect to any computer program or part thereof
that is not necessary for that machine to be activated, such
program or part thereof is not accessed or used other than to
make such new copy by virtue of the activation of the
machine.
``(d) Definitions.--For purposes of this section--
``(1) the `maintenance' of a machine is the servicing of
the machine in order to make it work in accordance with its
original specifications and any changes to those
specifications authorized for that machine; and
``(2) the `repair' of a machine is the restoring of the
machine to the state of working in accordance with its
original specifications and any changes to those
specifications authorized for that machine.''.
TITLE IV--MISCELLANEOUS PROVISIONS
SEC. 401. PROVISIONS RELATING TO THE COMMISSIONER OF PATENTS
AND TRADEMARKS AND THE REGISTER OF COPYRIGHTS
(a) Compensation.--(1) Section 3(d) of title 35, United
States Code, is amended by striking ``prescribed by law for
Assistant Secretaries of Commerce'' and inserting ``in effect
for level III of the Executive Schedule under section 5314 of
title 5, United States Code''.
(2) Section 701(e) of title 17, United States Code, is
amended--
(A) by striking ``IV'' and inserting ``III''; and
(B) by striking ``5315'' and inserting ``5314''.
(3) Section 5314 of title 5, United States Code, is amended
by adding at the end the following:
``Assistant Secretary of Commerce and Commissioner of
Patents and Trademarks.
``Register of Copyrights.''.
(b) Clarification of Authority of the Copyright Office.--
Section 701 of title 17, United States Code, is amended--
(1) by redesignating subsections (b) through (e) as
subsections (c) through (f), respectively; and
(2) by inserting after subsection (a) the following:
``(b) In addition to the functions and duties set out
elsewhere in this chapter, the Register of Copyrights shall
perform the following functions:
``(1) Advise Congress on national and international issues
relating to copyright, other matters arising under this
title, and related matters.
``(2) Provide information and assistance to Federal
departments and agencies and the Judiciary on national and
international issues relating to copyright, other matters
arising under this title, and related matters.
``(3) Participate in meetings of international
intergovernmental organizations and meetings with foreign
government officials relating to copyright, other matters
arising under this title, and related matters, including as a
member of United States delegations as authorized by the
appropriate Executive branch authority.
``(4) Conduct studies and programs regarding copyright,
other matters arising under this title, and related matters,
the administration of the Copyright Office, or any function
vested in the Copyright Office by law, including educational
programs conducted cooperatively with foreign intellectual
property offices and international intergovernmental
organizations.
``(5) Perform such other functions as Congress may direct,
or as may be appropriate in furtherance of the functions and
duties specifically set forth in this title.''
SEC. 402. EPHEMERAL RECORDINGS.
Section 112(a) of title 17, United States Code, is
amended--
(1) by redesignating paragraphs (1), (2), and (3) as
subparagraphs (A), (B), and (C), respectively;
(2) by inserting ``(1)'' after ``(a)'';
(3) by inserting after ``under a license'' the following:
``, including a statutory license under section 114(f),'';
(4) by inserting after ``114(a),'' the following: ``or for
a transmitting organization that is a broadcast radio or
television station licensed as such by the Federal
Communications Commission and that makes a broadcast
transmission of a performance of a sound recording in a
digital format on a nonsubscription basis,''; and
(5) by adding at the end the following:
``(2) In a case in which a transmitting organization
entitled to make a copy or phonorecord under paragraph (1) in
connection with the transmission to the public of a
performance or display of a work is prevented from making
such copy or phonorecord by reason of the application by the
copyright owner of technical measures that prevent the
reproduction of the work, the copyright owner shall make
available to the transmitting organization the necessary
means for permitting the making of such copy or phonorecord
as permitted under that paragraph, if it is technologically
feasible and economically reasonable for the copyright owner
to do so. If the copyright owner fails to do so in a timely
manner in light of the transmitting organization's reasonable
business requirements, the transmitting organization shall
not be liable for a violation of section 1201(a)(1) of this
title for engaging in such activities as are necessary to
make such copies or phonorecords as permitted under paragraph
(1) of this subsection.''.
SEC. 403. LIMITATIONS ON EXCLUSIVE RIGHTS; DISTANCE
EDUCATION.
(a) Recommendations by Register of Copyrights.--Not later
than 6 months after the date of the enactment of this Act,
the Register of Copyrights, after consultation with
representatives of copyright owners, nonprofit educational
institutions, and nonprofit libraries and archives, shall
submit to the Congress recommendations on how to promote
distance education through digital technologies, including
interactive digital networks, while maintaining an
appropriate balance between the rights of copyright owners
and the needs of users of copyrighted works. Such
recommendations shall include any legislation the Register of
Copyrights considers appropriate to achieve the objective
described in the preceding sentence.
(b) Factors.--In formulating recommendations under
subsection (a), the Register of Copyrights shall consider--
(1) the need for an exemption from exclusive rights of
copyright owners for distance education through digital
networks;
(2) the categories of works to be included under any
distance education exemption;
(3) the extent of appropriate quantitative limitations on
the portions of works that may be used under any distance
education exemption;
(4) the parties who should be entitled to the benefits of
any distance education exemption;
(5) the parties who should be designated as eligible
recipients of distance education materials under any distance
education exemption;
(6) whether and what types of technological measures can or
should be employed to safeguard against unauthorized access
to, and use or retention of, copyrighted materials as a
condition of eligibility for any distance education
exemption, including, in light of developing technological
capabilities, the exemption set out in section 110(2) of
title 17, United States Code;
(7) the extent to which the availability of licenses for
the use of copyrighted works in distance education through
interactive digital networks should be considered in
assessing eligibility for any distance education exemption;
and
(8) such other issues relating to distance education
through interactive digital networks that the Register
considers appropriate.
SEC. 404. EXEMPTION FOR LIBRARIES AND ARCHIVES.
Section 108 of title 17, United States Code, is amended--
(1) in subsection (a)--
(A) by striking ``Notwithstanding'' and inserting ``Except
as otherwise provided in this title and notwithstanding'';
(B) by inserting after ``no more than one copy or
phonorecord of a work'' the following: ``, except as provided
in subsections (b) and (c)''; and
(C) in paragraph (3) by inserting after ``copyright'' the
following: ``that appears on the copy or phonorecord that is
reproduced under the provisions of this section, or includes
a legend stating that the work may be protected by copyright
if no such notice can be found on the copy or phonorecord
that is reproduced under the provisions of this section'';
(2) in subsection (b)--
(A) by striking ``a copy or phonorecord'' and inserting
``three copies or phonorecords'';
(B) by striking ``in facsimile form''; and
(C) by striking ``if the copy or phonorecord reproduced is
currently in the collections of the library or archives.''
and inserting ``if--
``(1) the copy or phonorecord reproduced is currently in
the collections of the library or archives; and
``(2) any such copy or phonorecord that is reproduced in
digital format is not otherwise distributed in that format
and is not made available to the public in that format
outside the premises of the library or archives.''; and
(3) in subsection (c)--
(A) by striking ``a copy or phonorecord'' and inserting
``three copies or phonorecords'';
(B) by striking ``in facsimile form'';
(C) by inserting ``or if the existing format in which the
work is stored has become obsolete,'' after ``stolen,''; and
(D) by striking ``if the library or archives has, after a
reasonable effort, determined that an unused replacement
cannot be obtained at a fair price.'' and inserting ``if--
``(1) the library or archives has, after a reasonable
effort, determined that an unused replacement cannot be
obtained at a fair price; and
``(2) any such copy or phonorecord that is reproduced in
digital format is not made available to the public in that
format outside the premises of the library or archives in
lawful possession of such copy.''; and
(E) by adding at the end the following:
``For purposes of this subsection, a format shall be
considered obsolete if the machine or device necessary to
render perceptible a work stored in that format is no longer
manufactured or is no longer reasonably available in the
commercial marketplace.''.
[[Page H10057]]
SEC. 405. SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORDINGS;
EPHEMERAL RECORDINGS.
(a) Scope of Exclusive Rights in Sound Recordings.--Section
114 of title 17, United States Code, is amended as follows:
(1) Subsection (d) is amended--
(A) in paragraph (1) by striking subparagraph (A) and
inserting the following:
``(A) a nonsubscription broadcast transmission;''; and
(B) by amending paragraph (2) to read as follows:
``(2) Statutory Licensing of Certain Transmissions.--The
performance of a sound recording publicly by means of a
subscription digital audio transmission not exempt under
paragraph (1), an eligible nonsubscription transmission, or a
transmission not exempt under paragraph (1) that is made by a
preexisting satellite digital audio radio service shall be
subject to statutory licensing, in accordance with
subsection (f) if--
``(A)(i) the transmission is not part of an interactive
service;
``(ii) except in the case of a transmission to a business
establishment, the transmitting entity does not automatically
and intentionally cause any device receiving the transmission
to switch from one program channel to another; and
``(iii) except as provided in section 1002(e), the
transmission of the sound recording is accompanied, if
technically feasible, by the information encoded in that
sound recording, if any, by or under the authority of the
copyright owner of that sound recording, that identifies the
title of the sound recording, the featured recording artist
who performs on the sound recording, and related information,
including information concerning the underlying musical work
and its writer;
``(B) in the case of a subscription transmission not exempt
under paragraph (1) that is made by a preexisting
subscription service in the same transmission medium used by
such service on July 31, 1998, or in the case of a
transmission not exempt under paragraph (1) that is made by a
preexisting satellite digital audio radio service--
``(i) the transmission does not exceed the sound recording
performance complement; and
``(ii) the transmitting entity does not cause to be
published by means of an advance program schedule or prior
announcement the titles of the specific sound recordings or
phonorecords embodying such sound recordings to be
transmitted; and
``(C) in the case of an eligible nonsubscription
transmission or a subscription transmission not exempt under
paragraph (1) that is made by a new subscription service or
by a preexisting subscription service other than in the same
transmission medium used by such service on July 31, 1998--
``(i) the transmission does not exceed the sound recording
performance complement, except that this requirement shall
not apply in the case of a retransmission of a broadcast
transmission if the retransmission is made by a transmitting
entity that does not have the right or ability to control the
programming of the broadcast station making the broadcast
transmission, unless--
``(I) the broadcast station makes broadcast transmissions--
``(aa) in digital format that regularly exceed the sound
recording performance complement; or
``(bb) in analog format, a substantial portion of which, on
a weekly basis, exceed the sound recording performance
complement; and
``(II) the sound recording copyright owner or its
representative has notified the transmitting entity in
writing that broadcast transmissions of the copyright owner's
sound recordings exceed the sound recording performance
complement as provided in this clause;
``(ii) the transmitting entity does not cause to be
published, or induce or facilitate the publication, by means
of an advance program schedule or prior announcement, the
titles of the specific sound recordings to be transmitted,
the phonorecords embodying such sound recordings, or, other
than for illustrative purposes, the names of the featured
recording artists, except that this clause does not
disqualify a transmitting entity that makes a prior
announcement that a particular artist will be featured within
an unspecified future time period, and in the case of a
retransmission of a broadcast transmission by a transmitting
entity that does not have the right or ability to control the
programming of the broadcast transmission, the requirement of
this clause shall not apply to a prior oral announcement by
the broadcast station, or to an advance program schedule
published, induced, or facilitated by the broadcast station,
if the transmitting entity does not have actual knowledge and
has not received written notice from the copyright owner or
its representative that the broadcast station publishes or
induces or facilitates the publication of such advance
program schedule, or if such advance program schedule is a
schedule of classical music programming published by the
broadcast station in the same manner as published by that
broadcast station on or before September 30, 1998;
``(iii) the transmission--
``(I) is not part of an archived program of less than 5
hours duration;
``(II) is not part of an archived program of 5 hours or
greater in duration that is made available for a period
exceeding 2 weeks;
``(III) is not part of a continuous program which is of
less than 3 hours duration; or
``(IV) is not part of an identifiable program in which
performances of sound recordings are rendered in a
predetermined order, other than an archived or continuous
program, that is transmitted at--
``(aa) more than 3 times in any 2-week period that have
been publicly announced in advance, in the case of a program
of less than 1 hour in duration, or
``(bb) more than 4 times in any 2-week period that have
been publicly announced in advance, in the case of a program
of 1 hour or more in duration,
except that the requirement of this subclause shall not apply
in the case of a retransmission of a broadcast transmission
by a transmitting entity that does not have the right or
ability to control the programming of the broadcast
transmission, unless the transmitting entity is given notice
in writing by the copyright owner of the sound recording that
the broadcast station makes broadcast transmissions that
regularly violate such requirement;
``(iv) the transmitting entity does not knowingly perform
the sound recording, as part of a service that offers
transmissions of visual images contemporaneously with
transmissions of sound recordings, in a manner that is likely
to cause confusion, to cause mistake, or to deceive, as to
the affiliation, connection, or association of the copyright
owner or featured recording artist with the transmitting
entity or a particular product or service advertised by the
transmitting entity, or as to the origin, sponsorship, or
approval by the copyright owner or featured recording artist
of the activities of the transmitting entity other than the
performance of the sound recording itself;
``(v) the transmitting entity cooperates to prevent, to the
extent feasible without imposing substantial costs or
burdens, a transmission recipient or any other person or
entity from automatically scanning the transmitting entity's
transmissions alone or together with transmissions by other
transmitting entities in order to select a particular sound
recording to be transmitted to the transmission recipient,
except that the requirement of this clause shall not apply to
a satellite digital audio service that is in operation, or
that is licensed by the Federal Communications Commission,
on or before July 31, 1998;
``(vi) the transmitting entity takes no affirmative steps
to cause or induce the making of a phonorecord by the
transmission recipient, and if the technology used by the
transmitting entity enables the transmitting entity to limit
the making by the transmission recipient of phonorecords of
the transmission directly in a digital format, the
transmitting entity sets such technology to limit such making
of phonorecords to the extent permitted by such technology;
``(vii) phonorecords of the sound recording have been
distributed to the public under the authority of the
copyright owner or the copyright owner authorizes the
transmitting entity to transmit the sound recording, and the
transmitting entity makes the transmission from a phonorecord
lawfully made under the authority of the copyright owner,
except that the requirement of this clause shall not apply to
a retransmission of a broadcast transmission by a
transmitting entity that does not have the right or ability
to control the programming of the broadcast transmission,
unless the transmitting entity is given notice in writing by
the copyright owner of the sound recording that the broadcast
station makes broadcast transmissions that regularly violate
such requirement;
``(viii) the transmitting entity accommodates and does not
interfere with the transmission of technical measures that
are widely used by sound recording copyright owners to
identify or protect copyrighted works, and that are
technically feasible of being transmitted by the transmitting
entity without imposing substantial costs on the transmitting
entity or resulting in perceptible aural or visual
degradation of the digital signal, except that the
requirement of this clause shall not apply to a satellite
digital audio service that is in operation, or that is
licensed under the authority of the Federal Communications
Commission, on or before July 31, 1998, to the extent that
such service has designed, developed, or made commitments to
procure equipment or technology that is not compatible with
such technical measures before such technical measures are
widely adopted by sound recording copyright owners; and
``(ix) the transmitting entity identifies in textual data
the sound recording during, but not before, the time it is
performed, including the title of the sound recording, the
title of the phonorecord embodying such sound recording, if
any, and the featured recording artist, in a manner to permit
it to be displayed to the transmission recipient by the
device or technology intended for receiving the service
provided by the transmitting entity, except that the
obligation in this clause shall not take effect until 1 year
after the date of the enactment of the Digital Millennium
Copyright Act and shall not apply in the case of a
retransmission of a broadcast transmission by a transmitting
entity that does not have the right or ability to control the
programming of the broadcast transmission, or in the case in
which devices or technology intended for receiving the
service provided by the transmitting entity that have the
capability to display such textual data are not common in the
marketplace.''.
(2) Subsection (f) is amended--
(A) in the subsection heading by striking ``Nonexempt
Subscription'' and inserting ``Certain Nonexempt'';
(B) in paragraph (1)--
(i) in the first sentence--
(I) by striking ``(1) No'' and inserting ``(1)(A) No'';
(II) by striking ``the activities'' and inserting
``subscription transmissions by preexisting subscription
services and transmissions by preexisting satellite digital
audio radio services''; and
(III) by striking ``2000'' and inserting ``2001''; and
(ii) by amending the third sentence to read as follows:
``Any copyright owners of sound recordings, preexisting
subscription services, or preexisting satellite digital audio
radio services may submit to the Librarian of Congress
licenses
[[Page H10058]]
covering such subscription transmissions with respect to such
sound recordings.''; and
(C) by striking paragraphs (2), (3), (4), and (5) and
inserting the following:
``(B) In the absence of license agreements negotiated under
subparagraph (A), during the 60-day period commencing 6
months after publication of the notice specified in
subparagraph (A), and upon the filing of a petition in
accordance with section 803(a)(1), the Librarian of Congress
shall, pursuant to chapter 8, convene a copyright arbitration
royalty panel to determine and publish in the Federal
Register a schedule of rates and terms which, subject to
paragraph (3), shall be binding on all copyright owners of
sound recordings and entities performing sound recordings
affected by this paragraph. In establishing rates and terms
for preexisting subscription services and preexisting
satellite digital audio radio services, in addition to the
objectives set forth in section 801(b)(1), the copyright
arbitration royalty panel may consider the rates and terms
for comparable types of subscription digital audio
transmission services and comparable circumstances under
voluntary license agreements negotiated as provided in
subparagraph (A).
``(C)(i) Publication of a notice of the initiation of
voluntary negotiation proceedings as specified in
subparagraph (A) shall be repeated, in accordance with
regulations that the Librarian of Congress shall prescribe--
``(I) no later than 30 days after a petition is filed by
any copyright owners of sound recordings, any preexisting
subscription services, or any preexisting satellite digital
audio radio services indicating that a new type of
subscription digital audio transmission service on which
sound recordings are performed is or is about to become
operational; and
``(II) in the first week of January, 2001, and at 5-year
intervals thereafter.
``(ii) The procedures specified in subparagraph (B) shall
be repeated, in accordance with regulations that the
Librarian of Congress shall prescribe, upon filing of a
petition in accordance with section 803(a)(1) during a 60-day
period commencing--
``(I) 6 months after publication of a notice of the
initiation of voluntary negotiation proceedings under
subparagraph (A) pursuant to a petition under clause (i)(I)
of this subparagraph; or
``(II) on July 1, 2001, and at 5-year intervals thereafter.
``(iii) The procedures specified in subparagraph (B) shall
be concluded in accordance with section 802.
``(2)(A) No later than 30 days after the date of the
enactment of the Digital Millennium Copyright Act, the
Librarian of Congress shall cause notice to be published in
the Federal Register of the initiation of voluntary
negotiation proceedings for the purpose of determining
reasonable terms and rates of royalty payments for public
performances of sound recordings by means of eligible
nonsubscription transmissions and transmissions by new
subscription services specified by subsection (d)(2) during
the period beginning on the date of the enactment of such Act
and ending on December 31, 2000, or such other date as the
parties may agree. Such rates and terms shall distinguish
among the different types of eligible nonsubscription
transmission services and new subscription services then
in operation and shall include a minimum fee for each such
type of service. Any copyright owners of sound recordings
or any entities performing sound recordings affected by
this paragraph may submit to the Librarian of Congress
licenses covering such eligible nonsubscription
transmissions and new subscription services with respect
to such sound recordings. The parties to each negotiation
proceeding shall bear their own costs.
``(B) In the absence of license agreements negotiated under
subparagraph (A), during the 60-day period commencing 6
months after publication of the notice specified in
subparagraph (A), and upon the filing of a petition in
accordance with section 803(a)(1), the Librarian of Congress
shall, pursuant to chapter 8, convene a copyright arbitration
royalty panel to determine and publish in the Federal
Register a schedule of rates and terms which, subject to
paragraph (3), shall be binding on all copyright owners of
sound recordings and entities performing sound recordings
affected by this paragraph during the period beginning on the
date of the enactment of the Digital Millennium Copyright Act
and ending on December 31, 2000, or such other date as the
parties may agree. Such rates and terms shall distinguish
among the different types of eligible nonsubscription
transmission services then in operation and shall include a
minimum fee for each such type of service, such differences
to be based on criteria including, but not limited to, the
quantity and nature of the use of sound recordings and the
degree to which use of the service may substitute for or may
promote the purchase of phonorecords by consumers. In
establishing rates and terms for transmissions by eligible
nonsubscription services and new subscription services, the
copyright arbitration royalty panel shall establish rates and
terms that most clearly represent the rates and terms that
would have been negotiated in the marketplace between a
willing buyer and a willing seller. In determining such rates
and terms, the copyright arbitration royalty panel shall base
its decision on economic, competitive and programming
information presented by the parties, including--
``(i) whether use of the service may substitute for or may
promote the sales of phonorecords or otherwise may interfere
with or may enhance the sound recording copyright owner's
other streams of revenue from its sound recordings; and
``(ii) the relative roles of the copyright owner and the
transmitting entity in the copyrighted work and the service
made available to the public with respect to relative
creative contribution, technological contribution, capital
investment, cost, and risk.
In establishing such rates and terms, the copyright
arbitration royalty panel may consider the rates and terms
for comparable types of digital audio transmission services
and comparable circumstances under voluntary license
agreements negotiated under subparagraph (A).
``(C)(i) Publication of a notice of the initiation of
voluntary negotiation proceedings as specified in
subparagraph (A) shall be repeated in accordance with
regulations that the Librarian of Congress shall prescribe--
``(I) no later than 30 days after a petition is filed by
any copyright owners of sound recordings or any eligible
nonsubscription service or new subscription service
indicating that a new type of eligible nonsubscription
service or new subscription service on which sound recordings
are performed is or is about to become operational; and
``(II) in the first week of January 2000, and at 2-year
intervals thereafter, except to the extent that different
years for the repeating of such proceedings may be determined
in accordance with subparagraph (A).
``(ii) The procedures specified in subparagraph (B) shall
be repeated, in accordance with regulations that the
Librarian of Congress shall prescribe, upon filing of a
petition in accordance with section 803(a)(1) during a 60-day
period commencing--
``(I) 6 months after publication of a notice of the
initiation of voluntary negotiation proceedings under
subparagraph (A) pursuant to a petition under clause (i)(I);
or
``(II) on July 1, 2000, and at 2-year intervals thereafter,
except to the extent that different years for the repeating
of such proceedings may be determined in accordance with
subparagraph (A).
``(iii) The procedures specified in subparagraph (B) shall
be concluded in accordance with section 802.
``(3) License agreements voluntarily negotiated at any time
between 1 or more copyright owners of sound recordings and 1
or more entities performing sound recordings shall be given
effect in lieu of any determination by a copyright
arbitration royalty panel or decision by the Librarian of
Congress.
``(4)(A) The Librarian of Congress shall also establish
requirements by which copyright owners may receive reasonable
notice of the use of their sound recordings under this
section, and under which records of such use shall be kept
and made available by entities performing sound recordings.
``(B) Any person who wishes to perform a sound recording
publicly by means of a transmission eligible for statutory
licensing under this subsection may do so without infringing
the exclusive right of the copyright owner of the sound
recording--
``(i) by complying with such notice requirements as the
Librarian of Congress shall prescribe by regulation and by
paying royalty fees in accordance with this subsection; or
``(ii) if such royalty fees have not been set, by agreeing
to pay such royalty fees as shall be determined in accordance
with this subsection.
``(C) Any royalty payments in arrears shall be made on or
before the twentieth day of the month next succeeding the
month in which the royalty fees are set.''.
(3) Subsection (g) is amended--
(A) in the subsection heading by striking ``Subscription'';
(B) in paragraph (1) in the matter preceding subparagraph
(A), by striking ``subscription transmission licensed'' and
inserting ``transmission licensed under a statutory
license'';
(C) in subparagraphs (A) and (B) by striking
``subscription''; and
(D) in paragraph (2) by striking ``subscription''.
(4) Subsection (j) is amended--
(A) by striking paragraphs (4) and (9) and redesignating
paragraphs (2), (3), (5), (6), (7), and (8) as paragraphs
(3), (5), (9), (12), (13), and (14), respectively;
(B) by inserting after paragraph (1) the following:
``(2) An `archived program' is a predetermined program that
is available repeatedly on the demand of the transmission
recipient and that is performed in the same order from the
beginning, except that an archived program shall not include
a recorded event or broadcast transmission that makes no more
than an incidental use of sound recordings, as long as such
recorded event or broadcast transmission does not contain an
entire sound recording or feature a particular sound
recording.'';
(C) by inserting after paragraph (3), as so redesignated,
the following:
``(4) A `continuous program' is a predetermined program
that is continuously performed in the same order and that is
accessed at a point in the program that is beyond the control
of the transmission recipient.'';
(D) by inserting after paragraph (5), as so redesignated,
the following:
``(6) An `eligible nonsubscription transmission' is a
noninteractive nonsubscription digital audio transmission not
exempt under subsection (d)(1) that is made as part of a
service that provides audio programming consisting, in whole
or in part, of performances of sound recordings, including
retransmissions of broadcast transmissions, if the primary
purpose of the service is to provide to the public such audio
or other entertainment programming, and the primary purpose
of the service is not to sell, advertise, or promote
particular products or services other than sound
recordings, live concerts, or other music-related events.
``(7) An `interactive service' is one that enables a member
of the public to receive a transmission of a program
specially created for the recipient, or on request, a
transmission of a particular sound recording, whether or not
as part
[[Page H10059]]
of a program, which is selected by or on behalf of the
recipient. The ability of individuals to request that
particular sound recordings be performed for reception by the
public at large, or in the case of a subscription service, by
all subscribers of the service, does not make a service
interactive, if the programming on each channel of the
service does not substantially consist of sound recordings
that are performed within 1 hour of the request or at a time
designated by either the transmitting entity or the
individual making such request. If an entity offers both
interactive and noninteractive services (either concurrently
or at different times), the noninteractive component shall
not be treated as part of an interactive service.
``(8) A `new subscription service' is a service that
performs sound recordings by means of noninteractive
subscription digital audio transmissions and that is not a
preexisting subscription service or a preexisting satellite
digital audio radio service.'';
(E) by inserting after paragraph (9), as so redesignated,
the following:
``(10) A `preexisting satellite digital audio radio
service' is a subscription satellite digital audio radio
service provided pursuant to a satellite digital audio radio
service license issued by the Federal Communications
Commission on or before July 31, 1998, and any renewal of
such license to the extent of the scope of the original
license, and may include a limited number of sample channels
representative of the subscription service that are made
available on a nonsubscription basis in order to promote the
subscription service.
``(11) A `preexisting subscription service' is a service
that performs sound recordings by means of noninteractive
audio-only subscription digital audio transmissions, which
was in existence and was making such transmissions to the
public for a fee on or before July 31, 1998, and may include
a limited number of sample channels representative of the
subscription service that are made available on a
nonsubscription basis in order to promote the subscription
service.''; and
(F) by adding at the end the following:
``(15) A `transmission' is either an initial transmission
or a retransmission.''.
(5) The amendment made by paragraph (2)(B)(i)(III) of this
subsection shall be deemed to have been enacted as part of
the Digital Performance Right in Sound Recordings Act of
1995, and the publication of notice of proceedings under
section 114(f)(1) of title 17, United States Code, as in
effect upon the effective date of that Act, for the
determination of royalty payments shall be deemed to have
been made for the period beginning on the effective date of
that Act and ending on December 1, 2001.
(6) The amendments made by this subsection do not annul,
limit, or otherwise impair the rights that are preserved by
section 114 of title 17, United States Code, including the
rights preserved by subsections (c), (d)(4), and (i) of such
section.
(b) Ephemeral Recordings.--Section 112 of title 17, United
States Code, is amended--
(1) by redesignating subsection (e) as subsection (f); and
(2) by inserting after subsection (d) the following:
``(e) Statutory License.--(1) A transmitting organization
entitled to transmit to the public a performance of a sound
recording under the limitation on exclusive rights specified
by section 114(d)(1)(C)(iv) or under a statutory license in
accordance with section 114(f) is entitled to a statutory
license, under the conditions specified by this subsection,
to make no more than 1 phonorecord of the sound recording
(unless the terms and conditions of the statutory license
allow for more), if the following conditions are satisfied:
``(A) The phonorecord is retained and used solely by the
transmitting organization that made it, and no further
phonorecords are reproduced from it.
``(B) The phonorecord is used solely for the transmitting
organization's own transmissions originating in the United
States under a statutory license in accordance with section
114(f) or the limitation on exclusive rights specified by
section 114(d)(1)(C)(iv).
``(C) Unless preserved exclusively for purposes of archival
preservation, the phonorecord is destroyed within 6 months
from the date the sound recording was first transmitted to
the public using the phonorecord.
``(D) Phonorecords of the sound recording have been
distributed to the public under the authority of the
copyright owner or the copyright owner authorizes the
transmitting entity to transmit the sound recording, and the
transmitting entity makes the phonorecord under this
subsection from a phonorecord lawfully made and acquired
under the authority of the copyright owner.
``(3) Notwithstanding any provision of the antitrust laws,
any copyright owners of sound recordings and any transmitting
organizations entitled to a statutory license under this
subsection may negotiate and agree upon royalty rates and
license terms and conditions for making phonorecords of such
sound recordings under this section and the proportionate
division of fees paid among copyright owners, and may
designate common agents to negotiate, agree to, pay, or
receive such royalty payments.
``(4) No later than 30 days after the date of the enactment
of the Digital Millennium Copyright Act, the Librarian of
Congress shall cause notice to be published in the Federal
Register of the initiation of voluntary negotiation
proceedings for the purpose of determining reasonable terms
and rates of royalty payments for the activities specified by
paragraph (2) of this subsection during the period beginning
on the date of the enactment of such Act and ending on
December 31, 2000, or such other date as the parties may
agree. Such rates shall include a minimum fee for each type
of service offered by transmitting organizations. Any
copyright owners of sound recordings or any transmitting
organizations entitled to a statutory license under this
subsection may submit to the Librarian of Congress licenses
covering such activities with respect to such sound
recordings. The parties to each negotiation proceeding shall
bear their own costs.
``(5) In the absence of license agreements negotiated under
paragraph (3), during the 60-day period commencing 6 months
after publication of the notice specified in paragraph (4),
and upon the filing of a petition in accordance with section
803(a)(1), the Librarian of Congress shall, pursuant to
chapter 8, convene a copyright arbitration royalty panel to
determine and publish in the Federal Register a schedule of
reasonable rates and terms which, subject to paragraph (6),
shall be binding on all copyright owners of sound recordings
and transmitting organizations entitled to a statutory
license under this subsection during the period beginning on
the date of the enactment of the Digital Millennium Copyright
Act and ending on December 31, 2000, or such other date as
the parties may agree. Such rates shall include a minimum fee
for each type of service offered by transmitting
organizations. The copyright arbitration royalty panel
shall establish rates that most clearly represent the fees
that would have been negotiated in the marketplace between
a willing buyer and a willing seller. In determining such
rates and terms, the copyright arbitration royalty panel
shall base its decision on economic, competitive, and
programming information presented by the parties,
including--
``(A) whether use of the service may substitute for or may
promote the sales of phonorecords or otherwise interferes
with or enhances the copyright owner's traditional streams of
revenue; and
``(B) the relative roles of the copyright owner and the
transmitting organization in the copyrighted work and the
service made available to the public with respect to relative
creative contribution, technological contribution, capital
investment, cost, and risk.
In establishing such rates and terms, the copyright
arbitration royalty panel may consider the rates and terms
under voluntary license agreements negotiated as provided in
paragraphs (3) and (4). The Librarian of Congress shall also
establish requirements by which copyright owners may receive
reasonable notice of the use of their sound recordings under
this section, and under which records of such use shall be
kept and made available by transmitting organizations
entitled to obtain a statutory license under this subsection.
``(6) License agreements voluntarily negotiated at any time
between 1 or more copyright owners of sound recordings and 1
or more transmitting organizations entitled to obtain a
statutory license under this subsection shall be given effect
in lieu of any determination by a copyright arbitration
royalty panel or decision by the Librarian of Congress.
``(7) Publication of a notice of the initiation of
voluntary negotiation proceedings as specified in paragraph
(4) shall be repeated, in accordance with regulations that
the Librarian of Congress shall prescribe, in the first week
of January 2000, and at 2-year intervals thereafter, except
to the extent that different years for the repeating of such
proceedings may be determined in accordance with paragraph
(4). The procedures specified in paragraph (5) shall be
repeated, in accordance with regulations that the Librarian
of Congress shall prescribe, upon filing of a petition in
accordance with section 803(a)(1), during a 60-day period
commencing on July 1, 2000, and at 2-year intervals
thereafter, except to the extent that different years for the
repeating of such proceedings may be determined in accordance
with paragraph (4). The procedures specified in paragraph (5)
shall be concluded in accordance with section 802.
``(8)(A) Any person who wishes to make a phonorecord of a
sound recording under a statutory license in accordance with
this subsection may do so without infringing the exclusive
right of the copyright owner of the sound recording under
section 106(1)--
``(i) by complying with such notice requirements as the
Librarian of Congress shall prescribe by regulation and by
paying royalty fees in accordance with this subsection; or
``(ii) if such royalty fees have not been set, by agreeing
to pay such royalty fees as shall be determined in accordance
with this subsection.
``(B) Any royalty payments in arrears shall be made on or
before the 20th day of the month next succeeding the month in
which the royalty fees are set.
``(9) If a transmitting organization entitled to make a
phonorecord under this subsection is prevented from making
such phonorecord by reason of the application by the
copyright owner of technical measures that prevent the
reproduction of the sound recording, the copyright owner
shall make available to the transmitting organization the
necessary means for permitting the making of such phonorecord
as permitted under this subsection, if it is technologically
feasible and economically reasonable for the copyright owner
to do so. If the copyright owner fails to do so in a timely
manner in light of the transmitting organization's reasonable
business requirements, the transmitting organization shall
not be liable for a violation of section 1201(a)(1) of this
title for engaging in such activities as are necessary to
make such phonorecords as permitted under this subsection.
``(10) Nothing in this subsection annuls, limits, impairs,
or otherwise affects in any way the existence or value of any
of the exclusive rights of the copyright owners in a sound
recording, except as otherwise provided in this subsection,
or in a musical work, including the exclusive rights to
reproduce and distribute a sound recording or musical work,
including by means of
[[Page H10060]]
a digital phonorecord delivery, under section 106(1), 106(3),
and 115, and the right to perform publicly a sound recording
or musical work, including by means of a digital audio
transmission, under sections 106(4) and 106(6).''.
(c) Scope of Section 112(a) of Title 17 Not Affected.--
Nothing in this section or the amendments made by this
section shall affect the scope of section 112(a) of title 17,
United States Code, or the entitlement of any person to an
exemption thereunder.
(d) Procedural Amendments to Chapter 8.--Section 802 of
title 17, United States Code, is amended--
(1) in subsection (f)--
(A) in the first sentence by striking ``60'' and inserting
``90''; and
(B) in the third sentence by striking ``that 60-day
period'' and inserting ``an additional 30-day period''; and
(2) in subsection (g) by inserting after the second
sentence the following: ``When this title provides that the
royalty rates or terms that were previously in effect are to
expire on a specified date, any adjustment by the Librarian
of those rates or terms shall be effective as of the day
following the date of expiration of the rates or terms that
were previously in effect, even if the Librarian's decision
is rendered on a later date.''.
(e) Conforming Amendments.--(1) Section 801(b)(1) of title
17, United States Code, is amended in the second sentence by
striking ``sections 114, 115, and 116'' and inserting
``sections 114(f)(1)(B), 115, and 116''.
(2) Section 802(c) of title 17, United States Code, is
amended by striking ``section 111, 114, 116, or 119, any
person entitled to a compulsory license'' and inserting
``section 111, 112, 114, 116, or 119, any transmitting
organization entitled to a statutory license under section
112(f), any person entitled to a statutory license''.
(3) Section 802(g) of title 17, United States Code, is
amended by striking ``sections 111, 114'' and inserting
``sections 111, 112, 114''.
(4) Section 802(h)(2) of title 17, United States Code, is
amended by striking ``section 111, 114'' and inserting
``section 111, 112, 114''.
(5) Section 803(a)(1) of title 17, United States Code, is
amended by striking ``sections 114, 115'' and inserting
``sections 112, 114, 115''.
(6) Section 803(a)(5) of title 17, United States Code, is
amended--
(A) by striking ``section 114'' and inserting ``section 112
or 114''; and
(B) by striking ``that section'' and inserting ``those
sections''.
SEC. 406. ASSUMPTION OF CONTRACTUAL OBLIGATIONS RELATED TO
TRANSFERS OF RIGHTS IN MOTION PICTURES.
(a) In General.--Part VI of title 28, United States Code,
is amended by adding at the end the following new chapter:
``CHAPTER 180--ASSUMPTION OF CERTAIN CONTRACTUAL OBLIGATIONS
``Sec. 4001. Assumption of contractual obligations related to transfers
of rights in motion pictures.
``Sec. 4001. Assumption of contractual obligations related to
transfers of rights in motion pictures
``(a) Assumption of Obligations.--(1) In the case of a
transfer of copyright ownership under United States law in a
motion picture (as the terms `transfer of copyright
ownership' and `motion picture' are defined in section 101 of
title 17) that is produced subject to 1 or more collective
bargaining agreements negotiated under the laws of the United
States, if the transfer is executed on or after the effective
date of this chapter and is not limited to public performance
rights, the transfer instrument shall be deemed to
incorporate the assumption agreements applicable to the
copyright ownership being transferred that are required by
the applicable collective bargaining agreement, and the
transferee shall be subject to the obligations under each
such assumption agreement to make residual payments and
provide related notices, accruing after the effective date of
the transfer and applicable to the exploitation of the rights
transferred, and any remedies under each such assumption
agreement for breach of those obligations, as those
obligations and remedies are set forth in the applicable
collective bargaining agreement, if--
``(A) the transferee knows or has reason to know at the
time of the transfer that such collective bargaining
agreement was or will be applicable to the motion picture; or
``(B) in the event of a court order confirming an
arbitration award against the transferor under the collective
bargaining agreement, the transferor does not have the
financial ability to satisfy the award within 90 days after
the order is issued.
``(2) For purposes of paragraph (1)(A), `knows or has
reason to know' means any of the following:
``(A) Actual knowledge that the collective bargaining
agreement was or will be applicable to the motion picture.
``(B)(i) Constructive knowledge that the collective
bargaining agreement was or will be applicable to the motion
picture, arising from recordation of a document pertaining to
copyright in the motion picture under section 205 of title 17
or from publication, at a site available to the public on-
line that is operated by the relevant union, of information
that identifies the motion picture as subject to a collective
bargaining agreement with that union, if the site permits
commercially reasonable verification of the date on which the
information was available for access.
``(ii) Clause (i) applies only if the transfer referred to
in subsection (a)(1) occurs--
``(i) after the motion picture is completed, or
``(ii) before the motion picture is completed and--
``(I) within 18 months before the filing of an application
for copyright registration for the motion picture under
section 408 of title 17, or
``(II) if no such application is filed, within 18 months
before the first publication of the motion picture in the
United States.
``(C) Awareness of other facts and circumstances pertaining
to a particular transfer from which it is apparent that the
collective bargaining agreement was or will be applicable to
the motion picture.
``(b) Scope of Exclusion of Transfers of Public Performance
Rights.--For purposes of this section, the exclusion under
subsection (a) of transfers of copyright ownership in a
motion picture that are limited to public performance
rights includes transfers to a terrestrial broadcast
station, cable system, or programmer to the extent that
the station, system, or programmer is functioning as an
exhibitor of the motion picture, either by exhibiting the
motion picture on its own network, system, service, or
station, or by initiating the transmission of an
exhibition that is carried on another network, system,
service, or station. When a terrestrial broadcast station,
cable system, or programmer, or other transferee, is also
functioning otherwise as a distributor or as a producer of
the motion picture, the public performance exclusion does
not affect any obligations imposed on the transferee to
the extent that it is engaging in such functions.
``(c) Exclusion for Grants of Security Interests.--
Subsection (a) shall not apply to--
``(1) a transfer of copyright ownership consisting solely
of a mortgage, hypothecation, or other security interest; or
``(2) a subsequent transfer of the copyright ownership
secured by the security interest described in paragraph (1)
by or under the authority of the secured party, including a
transfer through the exercise of the secured party's rights
or remedies as a secured party, or by a subsequent
transferee.
The exclusion under this subsection shall not affect any
rights or remedies under law or contract.
``(d) Deferral Pending Resolution of Bona Fide Dispute.--A
transferee on which obligations are imposed under subsection
(a) by virtue of paragraph (1) of that subsection may elect
to defer performance of such obligations that are subject to
a bona fide dispute between a union and a prior transferor
until that dispute is resolved, except that such deferral
shall not stay accrual of any union claims due under an
applicable collective bargaining agreement.
``(e) Scope of Obligations Determined by Private
Agreement.--Nothing in this section shall expand or diminish
the rights, obligations, or remedies of any person under the
collective bargaining agreements or assumption agreements
referred to in this section.
``(f) Failure To Notify.--If the transferor under
subsection (a) fails to notify the transferee under
subsection (a) of applicable collective bargaining
obligations before the execution of the transfer instrument,
and subsection (a) is made applicable to the transferee
solely by virtue of subsection (a)(1)(B), the transferor
shall be liable to the transferee for any damages suffered by
the transferee as a result of the failure to notify.
``(g) Determination of Disputes and Claims.--Any dispute
concerning the application of subsections (a) through (f)
shall be determined by an action in United States district
court, and the court in its discretion may allow the recovery
of full costs by or against any party and may also award a
reasonable attorney's fee to the prevailing party as part of
the costs.
``(h) Study.--The Comptroller General, in consultation with
the Register of Copyrights, shall conduct a study of the
conditions in the motion picture industry that gave rise to
this section, and the impact of this section on the motion
picture industry. The Comptroller General shall report the
findings of the study to the Congress within 2 years after
the effective date of this chapter.''.
(b) Conforming Amendment.--The table of chapters for part
VI of title 28, United States Code, is amended by adding at
the end the following:
``180. Assumption of Certain Contractual Obligations........4001''.....
SEC. 407. EFFECTIVE DATE.
Except as otherwise provided in this title, this title and
the amendments made by this title shall take effect on the
date of the enactment of this Act.
TITLE V--PROTECTION OF CERTAIN ORIGINAL DESIGNS
SEC. 501. SHORT TITLE.
This Act may be referred to as the ``Vessel Hull Design
Protection Act''.
SEC. 502. PROTECTION OF CERTAIN ORIGINAL DESIGNS.
Title 17, United States Code, is amended by adding at the
end the following new chapter:
``CHAPTER 13--PROTECTION OF ORIGINAL DESIGNS
``Sec.
``1301. Designs protected.
``1302. Designs not subject to protection.
``1303. Revisions, adaptations, and rearrangements.
``1304. Commencement of protection.
``1305. Term of protection.
``1306. Design notice.
``1307. Effect of omission of notice.
``1308. Exclusive rights.
``1309. Infringement.
``1310. Application for registration.
``1311. Benefit of earlier filing date in foreign country.
``1312. Oaths and acknowledgments.
``1313. Examination of application and issue or refusal of
registration.
[[Page H10061]]
``1314. Certification of registration.
``1315. Publication of announcements and indexes.
``1316. Fees.
``1317. Regulations.
``1318. Copies of records.
``1319. Correction of errors in certificates.
``1320. Ownership and transfer.
``1321. Remedy for infringement.
``1322. Injunctions.
``1323. Recovery for infringement.
``1324. Power of court over registration.
``1325. Liability for action on registration fraudulently obtained.
``1326. Penalty for false marking.
``1327. Penalty for false representation.
``1328. Enforcement by Treasury and Postal Service .
``1329. Relation to design patent law.
``1330. Common law and other rights unaffected.
``1331. Administrator; Office of the Administrator.
``1332. No retroactive effect.
``Sec. 1301. Designs protected
``(a) Designs Protected.--
``(1) In general.--The designer or other owner of an
original design of a useful article which makes the article
attractive or distinctive in appearance to the purchasing or
using public may secure the protection provided by this
chapter upon complying with and subject to this chapter.
``(2) Vessel hulls.--The design of a vessel hull, including
a plug or mold, is subject to protection under this chapter,
notwithstanding section 1302(4).
``(b) Definitions.--For the purpose of this chapter, the
following terms have the following meanings:
``(1) A design is `original' if it is the result of the
designer's creative endeavor that provides a distinguishable
variation over prior work pertaining to similar articles
which is more than merely trivial and has not been copied
from another source.
``(2) A `useful article' is a vessel hull, including a plug
or mold, which in normal use has an intrinsic utilitarian
function that is not merely to portray the appearance of the
article or to convey information. An article which normally
is part of a useful article shall be deemed to be a useful
article.
``(3) A `vessel' is a craft, especially one larger than a
rowboat, designed to navigate on water, but does not include
any such craft that exceeds 200 feet in length.
``(4) A `hull' is the frame or body of a vessel, including
the deck of a vessel, exclusive of masts, sails, yards, and
rigging.
``(5) A `plug' means a device or model used to make a mold
for the purpose of exact duplication, regardless of whether
the device or model has an intrinsic utilitarian function
that is not only to portray the appearance of the product or
to convey information.
``(6) A `mold' means a matrix or form in which a substance
for material is used, regardless of whether the matrix or
form has an intrinsic utilitarian function that is not only
to portray the appearance of the product or to convey
information.
``Sec. 1302. Designs not subject to protection
``Protection under this chapter shall not be available for
a design that is--
``(1) not original;
``(2) staple or commonplace, such as a standard geometric
figure, a familiar symbol, an emblem, or a motif, or another
shape, pattern, or configuration which has become standard,
common, prevalent, or ordinary;
``(3) different from a design excluded by paragraph (2)
only in insignificant details or in elements which are
variants commonly used in the relevant trades;
``(4) dictated solely by a utilitarian function of the
article that embodies it; or
``(5) embodied in a useful article that was made public by
the designer or owner in the United States or a foreign
country more than 1 year before the date of the application
for registration under this chapter.
``Sec. 1303. Revisions, adaptations, and rearrangements
``Protection for a design under this chapter shall be
available notwithstanding the employment in the design of
subject matter excluded from protection under section 1302 if
the design is a substantial revision, adaptation, or
rearrangement of such subject matter. Such protection shall
be independent of any subsisting protection in subject matter
employed in the design, and shall not be construed as
securing any right to subject matter excluded from protection
under this chapter or as extending any subsisting protection
under this chapter.
``Sec. 1304. Commencement of protection
``The protection provided for a design under this chapter
shall commence upon the earlier of the date of publication of
the registration under section 1313(a) or the date the design
is first made public as defined by section 1310(b).
``Sec. 1305. Term of protection
``(a) In General.--Subject to subsection (b), the
protection provided under this chapter for a design shall
continue for a term of 10 years beginning on the date of the
commencement of protection under section 1304.
``(b) Expiration.--All terms of protection provided in this
section shall run to the end of the calendar year in which
they would otherwise expire.
``(c) Termination of Rights.--Upon expiration or
termination of protection in a particular design under this
chapter, all rights under this chapter in the design shall
terminate, regardless of the number of different articles in
which the design may have been used during the term of its
protection.
``Sec. 1306. Design notice
``(a) Contents of Design Notice.--(1) Whenever any design
for which protection is sought under this chapter is made
public under section 1310(b), the owner of the design shall,
subject to the provisions of section 1307, mark it or have it
marked legibly with a design notice consisting of--
``(A) the words `Protected Design', the abbreviation
`Prot'd Des.', or the letter `D' with a circle, or the symbol
*D*;
``(B) the year of the date on which protection for the
design commenced; and
``(C) the name of the owner, an abbreviation by which the
name can be recognized, or a generally accepted alternative
designation of the owner.
Any distinctive identification of the owner may be used for
purposes of subparagraph (C) if it has been recorded by the
Administrator before the design marked with such
identification is registered.
``(2) After registration, the registration number may be
used instead of the elements specified in subparagraphs (B)
and (C) of paragraph (1).
``(b) Location of Notice.--The design notice shall be so
located and applied as to give reasonable notice of design
protection while the useful article embodying the design is
passing through its normal channels of commerce.
``(c) Subsequent Removal of Notice.--When the owner of a
design has complied with the provisions of this section,
protection under this chapter shall not be affected by the
removal, destruction, or obliteration by others of the design
notice on an article.
``Sec. 1307. Effect of omission of notice
``(a) Actions With Notice.--Except as provided in
subsection (b), the omission of the notice prescribed in
section 1306 shall not cause loss of the protection under
this chapter or prevent recovery for infringement under this
chapter against any person who, after receiving written
notice of the design protection, begins an undertaking
leading to infringement under this chapter.
``(b) Actions Without Notice.--The omission of the notice
prescribed in section 1306 shall prevent any recovery under
section 1323 against a person who began an undertaking
leading to infringement under this chapter before receiving
written notice of the design protection. No injunction shall
be issued under this chapter with respect to such undertaking
unless the owner of the design reimburses that person for any
reasonable expenditure or contractual obligation in
connection with such undertaking that was incurred before
receiving written notice of the design protection, as the
court in its discretion directs. The burden of providing
written notice of design protection shall be on the owner of
the design.
``Sec. 1308. Exclusive rights
``The owner of a design protected under this chapter has
the exclusive right to--
``(1) make, have made, or import, for sale or for use in
trade, any useful article embodying that design; and
``(2) sell or distribute for sale or for use in trade any
useful article embodying that design.
``Sec. 1309. Infringement
``(a) Acts of Infringement.--Except as provided in
subjection (b), it shall be infringement of the exclusive
rights in a design protected under this chapter for any
person, without the consent of the owner of the design,
within the United States and during the term of such
protection, to--
``(1) make, have made, or import, for sale or for use in
trade, any infringing article as defined in subsection (e);
or
``(2) sell or distribute for sale or for use in trade any
such infringing article.
``(b) Acts of Sellers and Distributors.--A seller or
distributor of an infringing article who did not make or
import the article shall be deemed to have infringed on a
design protected under this chapter only if that person--
``(1) induced or acted in collusion with a manufacturer to
make, or an importer to import such article, except that
merely purchasing or giving an order to purchase such article
in the ordinary course of business shall not of itself
constitute such inducement or collusion; or
``(2) refused or failed, upon the request of the owner of
the design, to make a prompt and full disclosure of that
person's source of such article, and that person orders or
reorders such article after receiving notice by registered or
certified mail of the protection subsisting in the design.
``(c) Acts Without Knowledge.--It shall not be infringement
under this section to make, have made, import, sell, or
distribute, any article embodying a design which was created
without knowledge that a design was protected under this
chapter and was copied from such protected design.
``(d) Acts in Ordinary Course of Business.--A person who
incorporates into that person's product of manufacture an
infringing article acquired from others in the ordinary
course of business, or who, without knowledge of the
protected design embodied in an infringing article, makes or
processes the infringing article for the account of another
person in the ordinary course of business, shall not be
deemed to have infringed the rights in that design under this
chapter except under a condition contained in paragraph (1)
or (2) of subsection (b). Accepting an order or reorder from
the source of the infringing article shall be deemed ordering
or reordering within the meaning of subsection (b)(2).
``(e) Infringing Article Defined.--As used in this section,
an `infringing article' is any article the design of which
has been copied from a design protected under this chapter,
without the consent of the owner of the protected design. An
infringing article is not an illustration or picture of a
protected design in an advertisement,
[[Page H10062]]
book, periodical, newspaper, photograph, broadcast, motion
picture, or similar medium. A design shall not be deemed to
have been copied from a protected design if it is original
and not substantially similar in appearance to a protected
design.
``(f) Establishing Originality.--The party to any action or
proceeding under this chapter who alleges rights under this
chapter in a design shall have the burden of establishing the
design's originality whenever the opposing party introduces
an earlier work which is identical to such design, or so
similar as to make prima facie showing that such design was
copied from such work.
``(g) Reproduction for Teaching or Analysis.--It is not an
infringement of the exclusive rights of a design owner for a
person to reproduce the design in a useful article or in any
other form solely for the purpose of teaching, analyzing, or
evaluating the appearance, concepts, or techniques embodied
in the design, or the function of the useful article
embodying the design.
``Sec. 1310. Application for registration
``(a) Time Limit for Application for Registration.--
Protection under this chapter shall be lost if application
for registration of the design is not made within two years
after the date on which the design is first made public.
``(b) When Design Is Made Public.--A design is made public
when an existing useful article embodying the design is
anywhere publicly exhibited, publicly distributed, or offered
for sale or sold to the public by the owner of the design or
with the owner's consent.
``(c) Application by Owner of Design.--Application for
registration may be made by the owner of the design.
``(d) Contents of Application.--The application for
registration shall be made to the Administrator and shall
state--
``(1) the name and address of the designer or designers of
the design;
``(2) the name and address of the owner if different from
the designer;
``(3) the specific name of the useful article embodying the
design;
``(4) the date, if any, that the design was first made
public, if such date was earlier than the date of the
application;
``(5) affirmation that the design has been fixed in a
useful article; and
``(6) such other information as may be required by the
Administrator.
The application for registration may include a description
setting forth the salient features of the design, but the
absence of such a description shall not prevent registration
under this chapter.
``(e) Sworn Statement.--The application for registration
shall be accompanied by a statement under oath by the
applicant or the applicant's duly authorized agent or
representative, setting forth, to the best of the applicant's
knowledge and belief--
``(1) that the design is original and was created by the
designer or designers named in the application;
``(2) that the design has not previously been registered on
behalf of the applicant or the applicant's predecessor in
title; and
``(3) that the applicant is the person entitled to
protection and to registration under this chapter.
If the design has been made public with the design notice
prescribed in section 1306, the statement shall also describe
the exact form and position of the design notice.
``(f) Effect of Errors.--(1) Error in any statement or
assertion as to the utility of the useful article named in
the application under this section, the design of which is
sought to be registered, shall not affect the protection
secured under this chapter.
``(2) Errors in omitting a joint designer or in naming an
alleged joint designer shall not affect the validity of the
registration, or the actual ownership or the protection of
the design, unless it is shown that the error occurred with
deceptive intent.
``(g) Design Made in Scope of Employment.--In a case in
which the design was made within the regular scope of the
designer's employment and individual authorship of the design
is difficult or impossible to ascribe and the application so
states, the name and address of the employer for whom the
design was made may be stated instead of that of the
individual designer.
``(h) Pictorial Representation of Design.--The application
for registration shall be accompanied by two copies of a
drawing or other pictorial representation of the useful
article embodying the design, having one or more views,
adequate to show the design, in a form and style suitable for
reproduction, which shall be deemed a part of the
application.
``(i) Design in More Than One Useful Article.--If the
distinguishing elements of a design are in substantially the
same form in different useful articles, the design shall be
protected as to all such useful articles when protected as to
one of them, but not more than one registration shall be
required for the design.
``(j) Application for More Than One Design.--More than one
design may be included in the same application under such
conditions as may be prescribed by the Administrator. For
each design included in an application the fee prescribed for
a single design shall be paid.
``Sec. 1311. Benefit of earlier filing date in foreign
country
``An application for registration of a design filed in the
United States by any person who has, or whose legal
representative or predecessor or successor in title has,
previously filed an application for registration of the same
design in a foreign country which extends to designs of
owners who are citizens of the United States, or to
applications filed under this chapter, similar protection to
that provided under this chapter shall have that same effect
as if filed in the United States on the date on which the
application was first filed in such foreign country, if the
application in the United States is filed within 6 months
after the earliest date on which any such foreign application
was filed.
``Sec. 1312. Oaths and acknowledgments
``(a) In General.--Oaths and acknowledgments required by
this chapter--
``(1) may be made--
``(A) before any person in the United States authorized by
law to administer oaths; or
``(B) when made in a foreign country, before any diplomatic
or consular officer of the United States authorized to
administer oaths, or before any official authorized to
administer oaths in the foreign country concerned, whose
authority shall be proved by a certificate of a diplomatic or
consular officer of the United States; and
``(2) shall be valid if they comply with the laws of the
State or country where made.
``(b) Written Declaration in Lieu of Oath.--(1) The
Administrator may by rule prescribe that any document which
is to be filed under this chapter in the Office of the
Administrator and which is required by any law, rule, or
other regulation to be under oath, may be subscribed to by a
written declaration in such form as the Administrator may
prescribe, and such declaration shall be in lieu of the oath
otherwise required.
``(2) Whenever a written declaration under paragraph (1) is
used, the document containing the declaration shall state
that willful false statements are punishable by fine or
imprisonment, or both, pursuant to section 1001 of title 18,
and may jeopardize the validity of the application or
document or a registration resulting therefrom.
``Sec. 1313. Examination of application and issue or refusal
of registration
``(a) Determination of Registrability of Design;
Registration.--Upon the filing of an application for
registration in proper form under section 1310, and upon
payment of the fee prescribed under section 1316, the
Administrator shall determine whether or not the application
relates to a design which on its face appears to be subject
to protection under this chapter, and, if so, the Register
shall register the design. Registration under this subsection
shall be announced by publication. The date of registration
shall be the date of publication.
``(b) Refusal To Register; Reconsideration.--If, in the
judgment of the Administrator, the application for
registration relates to a design which on its face is not
subject to protection under this chapter, the Administrator
shall send to the applicant a notice of refusal to register
and the grounds for the refusal. Within 3 months after the
date on which the notice of refusal is sent, the applicant
may, by written request, seek reconsideration of the
application. After consideration of such a request, the
Administrator shall either register the design or send to the
applicant a notice of final refusal to register.
``(c) Application To Cancel Registration.--Any person who
believes he or she is or will be damaged by a registration
under this chapter may, upon payment of the prescribed fee,
apply to the Administrator at any time to cancel the
registration on the ground that the design is not subject to
protection under this chapter, stating the reasons for the
request. Upon receipt of an application for cancellation, the
Administrator shall send to the owner of the design, as shown
in the records of the Office of the Administrator, a notice
of the application, and the owner shall have a period of 3
months after the date on which such notice is mailed in which
to present arguments to the Administrator for support of the
validity of the registration. The Administrator shall also
have the authority to establish, by regulation, conditions
under which the opposing parties may appear and be heard
in support of their arguments. If, after the periods
provided for the presentation of arguments have expired,
the Administrator determines that the applicant for
cancellation has established that the design is not
subject to protection under this chapter, the
Administrator shall order the registration stricken from
the record. Cancellation under this subsection shall be
announced by publication, and notice of the
Administrator's final determination with respect to any
application for cancellation shall be sent to the
applicant and to the owner of record.
``Sec. 1314. Certification of registration
``Certificates of registration shall be issued in the name
of the United States under the seal of the Office of the
Administrator and shall be recorded in the official records
of the Office. The certificate shall state the name of the
useful article, the date of filing of the application, the
date of registration, and the date the design was made
public, if earlier than the date of filing of the
application, and shall contain a reproduction of the drawing
or other pictorial representation of the design. If a
description of the salient features of the design appears in
the application, the description shall also appear in the
certificate. A certificate of registration shall be admitted
in any court as prima facie evidence of the facts stated in
the certificate.
``Sec. 1315. Publication of announcements and indexes
``(a) Publications of the Administrator.--The Administrator
shall publish lists and indexes of registered designs and
cancellations of designs and may also publish the drawings or
other pictorial representations of registered designs for
sale or other distribution.
``(b) File of Representatives of Registered Designs.--The
Administrator shall establish and maintain a file of the
drawings or other pictorial representations of registered
designs. The file shall be available for use by the public
under such conditions as the Administrator may prescribe.
[[Page H10063]]
``Sec. 1316. Fees
``The Administrator shall by regulation set reasonable fees
for the filing of applications to register designs under this
chapter and for other services relating to the administration
of this chapter, taking into consideration the cost of
providing these services and the benefit of a public record.
``Sec. 1317. Regulations
``The Administrator may establish regulations for the
administration of this chapter.
``Sec. 1318. Copies of records
``Upon payment of the prescribed fee, any person may obtain
a certified copy of any official record of the Office of the
Administrator that relates to this chapter. That copy shall
be admissible in evidence with the same effect as the
original.
``Sec. 1319. Correction of errors in certificates
``The Administrator may, by a certificate of correction
under seal, correct any error in a registration incurred
through the fault of the Office, or, upon payment of the
required fee, any error of a clerical or typographical nature
occurring in good faith but not through the fault of the
Office. Such registration, together with the certificate,
shall thereafter have the same effect as if it had been
originally issued in such corrected form.
``Sec. 1320. Ownership and transfer
``(a) Property Right in Design.--The property right in a
design subject to protection under this chapter shall vest in
the designer, the legal representatives of a deceased
designer or of one under legal incapacity, the employer for
whom the designer created the design in the case of a design
made within the regular scope of the designer's employment,
or a person to whom the rights of the designer or of such
employer have been transferred. The person in whom the
property right is vested shall be considered the owner of the
design.
``(b) Transfer of Property Right.--The property right in a
registered design, or a design for which an application for
registration has been or may be filed, may be assigned,
granted, conveyed, or mortgaged by an instrument in writing,
signed by the owner, or may be bequeathed by will.
``(c) Oath or Acknowledgement of Transfer.--An oath or
acknowledgment under section 1312 shall be prima facie
evidence of the execution of an assignment, grant,
conveyance, or mortgage under subsection (b).
``(d) Recordation of Transfer.--An assignment, grant,
conveyance, or mortgage under subsection (b) shall be void as
against any subsequent purchaser or mortgagee for a valuable
consideration, unless it is recorded in the Office of the
Administrator within 3 months after its date of execution or
before the date of such subsequent purchase or mortgage.
``Sec. 1321. Remedy for infringement
``(a) In General.--The owner of a design is entitled, after
issuance of a certificate of registration of the design under
this chapter, to institute an action for any infringement
of the design.
``(b) Review of Refusal To Register.--(1) Subject to
paragraph (2), the owner of a design may seek judicial review
of a final refusal of the Administrator to register the
design under this chapter by bringing a civil action, and may
in the same action, if the court adjudges the design subject
to protection under this chapter, enforce the rights in that
design under this chapter.
``(2) The owner of a design may seek judicial review under
this section if--
``(A) the owner has previously duly filed and prosecuted to
final refusal an application in proper form for registration
of the design;
``(B) the owner causes a copy of the complaint in the
action to be delivered to the Administrator within 10 days
after the commencement of the action; and
``(C) the defendant has committed acts in respect to the
design which would constitute infringement with respect to a
design protected under this chapter.
``(c) Administrator as Party to Action.--The Administrator
may, at the Administrator's option, become a party to the
action with respect to the issue of registrability of the
design claim by entering an appearance within 60 days after
being served with the complaint, but the failure of the
Administrator to become a party shall not deprive the court
of jurisdiction to determine that issue.
``(d) Use of Arbitration To Resolve Dispute.--The parties
to an infringement dispute under this chapter, within such
time as may be specified by the Administrator by regulation,
may determine the dispute, or any aspect of the dispute, by
arbitration. Arbitration shall be governed by title 9. The
parties shall give notice of any arbitration award to the
Administrator, and such award shall, as between the parties
to the arbitration, be dispositive of the issues to which it
relates. The arbitration award shall be unenforceable until
such notice is given. Nothing in this subsection shall
preclude the Administrator from determining whether a design
is subject to registration in a cancellation proceeding under
section 1313(c).
Sec. 1322. Injunctions
``(a) In General.--A court having jurisdiction over actions
under this chapter may grant injunctions in accordance with
the principles of equity to prevent infringement of a design
under this chapter, including, in its discretion, prompt
relief by temporary restraining orders and preliminary
injunctions.
``(b) Damages for Injunctive Relief Wrongfully Obtained.--A
seller or distributor who suffers damage by reason of
injunctive relief wrongfully obtained under this section has
a cause of action against the applicant for such injunctive
relief and may recover such relief as may be appropriate,
including damages for lost profits, cost of materials, loss
of good will, and punitive damages in instances where the
injunctive relief was sought in bad faith, and, unless the
court finds extenuating circumstances, reasonable attorney's
fees.
``Sec. 1323. Recovery for infringement
``(a) Damages.--Upon a finding for the claimant in an
action for infringement under this chapter, the court shall
award the claimant damages adequate to compensate for the
infringement. In addition, the court may increase the damages
to such amount, not exceeding $50,000 or $1 per copy,
whichever is greater, as the court determines to be just. The
damages awarded shall constitute compensation and not a
penalty. The court may receive expert testimony as an aid to
the determination of damages.
``(b) Infringer's Profits.--As an alternative to the
remedies provided in subsection (a), the court may award the
claimant the infringer's profits resulting from the sale of
the copies if the court finds that the infringer's sales are
reasonably related to the use of the claimant's design. In
such a case, the claimant shall be required to prove only the
amount of the infringer's sales and the infringer shall be
required to prove its expenses against such sales.
``(c) Statute of Limitations.--No recovery under subsection
(a) or (b) shall be had for any infringement committed more
than 3 years before the date on which the complaint is filed.
``(d) Attorney's Fees.--In an action for infringement under
this chapter, the court may award reasonable attorney's fees
to the prevailing party.
``(e) Disposition of Infringing and Other Articles.--The
court may order that all infringing articles, and any plates,
molds, patterns, models, or other means specifically adapted
for making the articles, be delivered up for destruction or
other disposition as the court may direct.
``Sec. 1324. Power of court over registration
``In any action involving the protection of a design under
this chapter, the court, when appropriate, may order
registration of a design under this chapter or the
cancellation of such a registration. Any such order shall be
certified by the court to the Administrator, who shall make
an appropriate entry upon the record.
``Sec. 1325. Liability for action on registration
fraudulently obtained
``Any person who brings an action for infringement knowing
that registration of the design was obtained by a false or
fraudulent representation materially affecting the rights
under this chapter, shall be liable in the sum of $10,000, or
such part of that amount as the court may determine. That
amount shall be to compensate the defendant and shall be
charged against the plaintiff and paid to the defendant, in
addition to such costs and attorney's fees of the defendant
as may be assessed by the court.
``Sec. 1326. Penalty for false marking
``(a) In General.--Whoever, for the purpose of deceiving
the public, marks upon, applies to, or uses in advertising in
connection with an article made, used, distributed, or sold,
a design which is not protected under this chapter, a design
notice specified in section 1306, or any other words or
symbols importing that the design is protected under this
chapter, knowing that the design is not so protected, shall
pay a civil fine of not more than $500 for each such offense.
``(b) Suit by Private Persons.--Any person may sue for the
penalty established by subsection (a), in which event one-
half of the penalty shall be awarded to the person suing and
the remainder shall be awarded to the United States.
``Sec. 1327. Penalty for false representation
``Whoever knowingly makes a false representation materially
affecting the rights obtainable under this chapter for the
purpose of obtaining registration of a design under this
chapter shall pay a penalty of not less than $500 and not
more than $1,000, and any rights or privileges that
individual may have in the design under this chapter shall be
forfeited.
``Sec. 1328. Enforcement by Treasury and Postal Service
``(a) Regulations.--The Secretary of the Treasury and the
United States Postal Service shall separately or jointly
issue regulations for the enforcement of the rights set forth
in section 1308 with respect to importation. Such regulations
may require, as a condition for the exclusion of articles
from the United States, that the person seeking exclusion
take any one or more of the following actions:
``(1) Obtain a court order enjoining, or an order of the
International Trade Commission under section 337 of the
Tariff Act of 1930 excluding, importation of the articles.
``(2) Furnish proof that the design involved is protected
under this chapter and that the importation of the articles
would infringe the rights in the design under this chapter.
``(3) Post a surety bond for any injury that may result if
the detention or exclusion of the articles proves to be
unjustified.
``(b) Seizure and Forfeiture.--Articles imported in
violation of the rights set forth in section 1308 are subject
to seizure and forfeiture in the same manner as property
imported in violation of the customs laws. Any such forfeited
articles shall be destroyed as directed by the Secretary of
the Treasury or the court, as the case may be, except that
the articles may be returned to the country of export
whenever it is shown to the satisfaction of the Secretary of
the Treasury that the importer had no reasonable grounds for
believing that his or her acts constituted a violation of the
law.
[[Page H10064]]
``Sec. 1329. Relation to design patent law
``The issuance of a design patent under title 35 for an
original design for an article of manufacture shall terminate
any protection of the original design under this chapter.
``Sec. 1330. Common law and other rights unaffected
``Nothing in this chapter shall annul or limit--
``(1) common law or other rights or remedies, if any,
available to or held by any person with respect to a design
which has not been registered under this chapter; or
``(2) any right under the trademark laws or any right
protected against unfair competition.
``Sec. 1331. Administrator; Office of the Administrator
``In this chapter, the `Administrator' is the Register of
Copyrights, and the `Office of the Administrator' and the
`Office' refer to the Copyright Office of the Library of
Congress.
``Sec. 1332. No retroactive effect
``Protection under this chapter shall not be available for
any design that has been made public under section 1310(b)
before the effective date of this chapter.''.
SEC. 503. CONFORMING AMENDMENTS.
(a) Table of Chapters.--The table of chapters for title 17,
United States Code, is amended by adding at the end the
following:
``13. Protection of Original Designs........................1301''.....
(b) Jurisdiction of District Courts Over Design Actions.--
(1) Section 1338(c) of title 28, United States Code, is
amended by inserting ``, and to exclusive rights in designs
under chapter 13 of title 17,'' after ``title 17''.
(2)(A) The section heading for section 1338 of title 28,
United States Code, is amended by inserting ``designs,''
after ``mask works,''.
(B) The item relating to section 1338 in the table of
sections at the beginning of chapter 85 of title 28, United
States Code, is amended by inserting ``designs,'' after
``mask works,''.
(c) Place for Bringing Design Actions.--(1) Section 1400(a)
of title 28, United States Code, is amended by inserting ``or
designs'' after ``mask works''.
(2) The section heading for section 1400 of title 28,
United States Code is amended to read as follows:
``Sec. Patents and copyrights, mask works, and designs''.
(3) The item relating to section 1400 in the table of
sections at the beginning of chapter 87 of title 28, United
States Code, is amended to read as follows:
``1400. Patents and copyrights, mask works, and designs.''.
(d) Actions Against the United States.--Section 1498(e) of
title 28, United States Code, is amended by inserting ``, and
to exclusive rights in designs under chapter 13 of title
17,'' after ``title 17''.
SEC. 504. JOINT STUDY OF THE EFFECT OF THIS TITLE.
(a) In general.--Not later than 1 year after the date of
the enactment of this Act, and not later than 2 years after
such date of enactment, the Register of Copyrights and the
Commissioner of Patents and Trademarks shall submit to the
Committees on the Judiciary of the Senate and the House of
Representatives a joint report evaluating the effect of the
amendments made by this title.
(b) Elements For Consideration.--In carrying out subsection
(a), the Register of Copyrights and the Commissioner of
Patents and Trademarks shall consider--
(1) the extent to which the amendments made by this title
has been effective in suppressing infringement of the design
of vessel hulls;
(2) the extent to which the registration provided for in
chapter 13 of title 17, United States Code, as added by this
title, has been utilized;
(3) the extent to which the creation of new designs of
vessel hulls have been encouraged by the amendments made by
this title;
(4) the effect, if any, of the amendments made by this
title on the price of vessels with hulls protected under such
amendments; and
(5) such other considerations as the Register and the
Commissioner may deem relevant to accomplish the purposes of
the evaluation conducted under subsection (a).
SEC. 505. EFFECTIVE DATE.
The amendments made by sections 502 and 503 shall take
effect on the date of the enactment of this Act and shall
remain in effect until the end of the 2-year period beginning
on such date of enactment. No cause of action based on
chapter 13 of title 17, United States Code, as added by this
title, may be filed after the end of that 2-year period.
Amend the title so as to read: ``A bill to amend title 17,
United States Code, to implement the World Intellectual
Property Organization Copyright Treaty and Performances and
Phonograms Treaty, and for other purposes.''.
And the Senate agree to the same.
From the Committee on Commerce, for consideration of the
House bill, and the Senate amendment, and modifications
committed to conference:
Tom Bliley,
Billy Tauzin,
John D. Dingell,
From the Committee on the Judiciary, for consideration of the
House bill, and the Senate amendment, and modifications
committed to conference:
Henry J. Hyde,
Howard Coble,
Bob Goodlatte,
John Conyers, Jr.,
Howard L. Berman,
Managers on the Part of the House.
Orrin G. Hatch,
Strom Thurmond,
Patrick J. Leahy,
Managers on the Part of the Senate.
JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE
The managers on the part of the House and the Senate at the
conference on the disagreeing votes of the two Houses on the
amendment of the Senate to the bill (H.R. 2281) to amend
title 17, United States Code, to implement the World
Intellectual Property Organization Copyright Treaty and
Performances and Phonograms Treaty, and for other purposes,
submit the following joint statement to the House and the
Senate in explanation of the effect of the action agreed upon
by the managers and recommended in the accompanying
conference report:
The Senate amendment struck all of the House bill after the
enacting clause and inserted a substitute text.
The House recedes from its disagreement to the amendment of
the Senate with an amendment that is a substitute for the
House bill and the Senate amendment. The differences between
the House bill, the Senate amendment, and the substitute
agreed to in conference are noted below, except for clerical
corrections, conforming changes made necessary by agreements
reached by the conferees, and minor drafting and clerical
changes.
Title I--WIPO Treaties Implementation
This title implements two new intellectual property
treaties, the WIPO Copyright Treaty and the WIPO Performances
and Phonograms Treaty, signed in Geneva, Switzerland in
December 1996.
section 101. short title
The House recedes to the Senate section 101. This section
sets forth the short title of the Act. As between the short
titles in the House bill and the Senate amendment, it is
believed that the title in Section 101 of the Senate
amendment more accurately reflects the effect of the Act.
section 102. technical amendments
The Senate recedes to House section 102. This section makes
technical and conforming amendments to the U.S. Copyright Act
in order to comply with the obligations of the two WIPO
treaties.
section 103. copyright protection systems and copyright management
information
The Senate recedes to House section 103 with modification.
The two new WIPO Treaties include substantively identical
provisions on technological measures of protection (also
commonly referred to as the ``black box'' or
``anticircumvention'' provisions). These provisions require
contracting parties to provide ``adequate legal protection
and effective legal remedies against the circumvention of
effective technological measures that are used by authors in
connection with the exercise of their rights under this
Treaty or the Berne Convention and that restrict acts, in
respect of their works, which are not authorized by the
authors concerned or permitted by law.''
Both of the new WIPO treaties also include substantively
identical provisions requiring contracting parties to protect
the integrity of copyright management information. The
treaties define copyright management information as
``information which identifies the work, the author of the
work, the owner of any right in the work, or information
about the terms and conditions of use of the work, and any
numbers or codes that represent such information, when any of
these items of information is attached to a copy of a work or
appears in connection with the communication of a work to the
public.''
Legislation is required to comply with both of these
provisions. To accomplish this, both the House bill and the
Senate amendment, in section 103, would add a new chapter
(chapter twelve) to title 17 of the United States Code. This
new chapter twelve includes five sections--(1) section 1201,
which prohibits the circumvention of technological measures
of protection; (2) section 1202, which protects the integrity
of copyright management information; (3) section 1203, which
provides for civil remedies for violations of sections 1201
and 1202; (4) section 1204, which provides for criminal
penalties for violations of sections 1201 and 1202; and (5)
section 1205, which provides a savings clause to preserve the
effectiveness of federal and state laws in protecting
individual privacy on the Internet. The House bill and the
Senate amendment differ in several respects, primarily
related to the scope and availability of exemptions from
the prohibitions under section 1201.
Section 1201(a)(1)--Rulemaking by the Librarian of
Congress. Section 1201(a)(1)(C) provides that the
determination of affected classes of works described in
subparagraph (A) shall be made by the Librarian of Congress
``upon the recommendation of the Register of Copyrights, who
shall consult with the Assistant Secretary for Communications
and Information of the Department of Commerce and report and
comment on his or her views in making such recommendation.''
The determination will be made in a rulemaking proceeding on
the record. It is the intention of the conferees that, as is
typical with other rulemaking under title 17, and in
recognition of the expertise of the Copyright Office, the
Register of Copyrights will conduct the rulemaking, including
providing notice of the rulemaking, seeking comments from the
public, consulting with the Assistant Secretary for
Communications and Information
[[Page H10065]]
of the Department of Commerce and any other agencies that are
deemed appropriate, and recommending final regulations in the
report to the Librarian.
Section 1201(a) and 1202--technological measures. It is the
understanding of the conferees that technological measures
will most often be developed through consultative, private
sector efforts by content owners, and makers of computers,
consumer electronics and telecommunications devices. The
conferees expect this consultative approach to continue as a
constructive and positive method. One of the benefits of such
consultation is to allow testing of proposed technologies to
determine whether there are adverse effects on the ordinary
performance of playback and display equipment in the
marketplace, and to take steps to eliminate or substantially
mitigate those effects before technologies are introduced.
The public interest is well-served by such activities.
Persons may also choose to implement a technological
measure without vetting it through an inter-industry
consultative process, or without regard to the input of
affected parties. Under such circumstances, such a
technological measure may materially degrade or otherwise
cause recurring appreciable adverse effects on the authorized
performance or display of works. Steps taken by the makers or
servicers of consumer electronics, telecommunications or
computing products used for such authorized performances or
displays solely to mitigate these adverse effects on product
performance (whether or not taken in combination with other
lawful product modifications) shall not be deemed a violation
of sections 1201(a) or (b).
However, this construction is not meant to afford
manufacturers or servicers an opportunity to give persons
unauthorized access to protected content, or to exercise the
rights under the Copyright Act of copyright owners in such
works, under the guise of ``correcting'' a performance
problem that results from the implementation of a particular
technological measure. Thus, it would violate sections
1201(a) or (b) for a manufacturer or servicer to take
remedial measures if they are held out for or undertaken
with, or result in equipment with only limited commercially
significant use other than, the prohibited purpose of
allowing users to gain unauthorized access to protected
content or to exercise the rights under the Copyright Act of
copyright owners in such works.
With regard to section 1202, product adjustments made to
eliminate recurring appreciable adverse effects on the
authorized performance or display of works caused by
copyright management information will not be deemed a
violation of section 1202 unless such steps are held out for
or undertaken with a prohibited purpose, or the requisite
knowledge, of inducing, enabling, facilitating or concealing
infringement of rights of copyright owners under the
Copyright Act.
Section 1201(e) and 1202(d)--Law enforcement, intelligence,
and other government activities. Sections 1201(e) and 1202(d)
create and exception to the prohibitions of sections 1201 and
1202 for the lawfully authorized investigative, protective,
or intelligence activities of an officer, agent, or employee
of, the United States, a State, or a political subdivision of
a State, or of persons acting pursuant to a contract with
such an entity. The anticircumvention provisions of this
legislation might be read to prohibit some aspects of the
information security testing that is critical to preventing
cyber attacks against government computers, computer systems,
and computer networks. The conferees have added language to
sections 1201(e) and 1202(d) to make it clear that the
anticircumvention prohibition does not apply to lawfully
authorized information security activities of the federal
government, the states, political subdivisions of states, or
persons acting within the scope of their government
information security contract. In this way, the bill will
permit the continuation of information security activities
that protect the country against one of the greatest threats
to our national security as well as to our economic security.
At the same time, this change is narrowly drafted so that
it does not open the door to the very piracy the treaties are
designed to prevent. For example, the term ``information
security'' activities is intended to include presidential
directives and executive orders concerning the
vulnerabilities of a computer, computer system, or computer
network. By this, the conferees intent to include the
recently-issued Presidential Decision Directive 63 on
Critical Infrastructure Protection. PDD-63 contains a number
of initiatives to ensure that the United States takes all
necessary measures to swiftly eliminate any significant
vulnerability to both physical and cyber attacks on the
nation's critical infrastructures, including especially our
cyber systems.
The Term ``computer system'' has the same definition for
purposes of this section as that term is defined in the
Computer Security Act, 15 U.S.C. Sec. 278g-3(d)(1).
Subsection 1201(g)--Encryption Research. Subsection (g)
permits the circumvention of access control technologies in
certain circumstances for the purpose of good faith
encryption research. The conferees note that section
1201(g)(3)(A) does not imply that the results of encryption
research must be disseminated. There is no requirement that
legitimate encryption researchers disseminate their findings
in order to quality for the encryption research exemption in
section 1201(g). Rather, the subsection describes
circumstances in which dissemination, if any, would be
weighed in determining eligibility.
Section 1201(j)--Security Testing. Subsection (j) clarifies
the intended effect of the bill with respect to information
security. The conferees understand this act to prohibit
unauthorized circumvention of technological measures applied
to works protected under title 17. The conferees recognize
that technological measures may also be used to protect the
integrity and security of computers, computer systems or
computer networks. It is not the intent of this act to
prevent persons utilizing technological measures in respect
of computers, computer systems or networks from testing the
security value and effectiveness of the technological
measures they employ, or from contracting with companies that
specialize in such security testing.
Thus, in addition to the exception for good faith
encryption research contained in Section 1201(g), the
conferees have adopted Section 1201(j) to resolve additional
issues related to the effect of the anti-circumvention
provision on legitimate information security activities.
First, the conferees were concerned that Section 1201(g)'s
exclusive focus on encryption-related research does not
encompass the entire range of legitimate information
security activities. Not every technological means that is
used to provide security relies on encryption technology,
or does so to the exclusion of other methods. Moreover, an
individual who is legitimately testing a security
technology may be doing so not to advance the state of
encryption research or to develop encryption products, but
rather to ascertain the effectiveness of that particular
security technology.
The conferees were also concerned that the anti-
circumvention provision of Section 1201(a) could be construed
to inhibit legitimate forms of security testing. It is not
unlawful to test the effectiveness of a security measure
before it is implemented to protect the work covered under
title 17. Not it is unlawful for a person who has implemented
a security measure to test its effectiveness. In this
respect, the scope of permissible security testing under the
Act should be the same as permissible testing of a simple
door lock; a prospective buyer may test the lock at the store
with the store's consent, or may purchase the lock and test
it at home in any manner that he or she sees fit--for
example, by installing the lock on the front door and seeing
if it can be picked. What that person may not do, however, it
test the lock once it has been installed on someone's else's
door, without the consent of the person whose property is
protected by the lock.
In order to resolve these concerns, Section 1201(j) creates
a exception of ``security testing.'' Section 1201(j)(1)
defines ``security testing'' as obtaining access to a
computer, computer system, or computer network for the sole
purpose of testing, investigating, or correcting a security
flaw or vulnerability, provided that the person engaging in
such testing is doing so with the consent of the owner or
operator of the computer, computer system, or computer
network. Section 102(j)(2) provides that, notwithstanding the
provisions of Section 1201(a), a person may engage in such
testing, provided that the act does not constitute
infringement or violate any other applicable law. Section
1201(j)(3) provides a non-exclusive list of factors that a
court shall consider in determining whether a person benefits
from this exception.
Section 1201(j)(4) permits an individual, notwithstanding
the prohibition contained in Section 1201(a)(2), to develop,
produce, distribute, or employ technological means for the
sole purpose of performing acts of good faith security
testing under Section 1201(j)(2), provided that technological
means do not otherwise violate section 1201(a)(2). It it
Congress' intent for this subsection to have application only
with respect to good faith security testing. The intent is to
ensure that parties engaged in good faith security testing
have the tools available to them to complete such acts. The
conferees understand that such tools may be coupled with
additional tools that serve purposes wholly unrelated to the
purposes of this Act. Eligibility for this exemption should
not be precluded because these tools are coupled in such a
way. The exemption would not be available, however, when such
tools are coupled with a product or technology that violates
section 1201(a)(2),
Section 1201(k)--Certain Analog Devices and Certain
Technological Measures.--The conferees included a provision
in the final legislation to require that analog video
cassette recorders must conform to the two forms of copy
control technology that are in wide use in the market today--
the automatic gain control copy control technology and the
colorstripe copy control technology. Neither are currently
required elements of any format of video recorder, and the
ability of each technology to work as intended depends on the
consistency of design of video recorders or on incorporation
of specific response elements in video recorders.
Moreover, they do not employ encryption or scrambling of
the content being protected.
As a consequence, these analog copy control technologies
may be rendered ineffective either by redesign of video
recorders or by intervention of ``black box'' devices or
software ``hacks''. The conferees believe, and specifically
intend, that the general circumvention prohibition in Section
1201(b)(2) will prohibit the manufacture and sale of ``black
box'' devices that defeat these technologies. Moreover, the
conferees believe and intend that the term ``technology''
should be read to include the software ``hacks'' of this
[[Page H10066]]
type, and that such ``hacks'' are equally prohibited by the
general circumvention provision. Devices have been marketed
that claim to ``fix'' television picture disruptions
allegedly caused by these technologies. However, as described
in more detail below, there is no justification for the
existence of any intervention device to ``fix'' such problems
allegedly caused by these technologies, including ``fixes''
allegedly related to stabilization or clean up of the picture
quality. Such devices should be seen for what they are--
circumvention devices prohibited by this legislation.
The conferees emphasize that this particular provision is
being included in this bill in order to deal with a very
specific situation involving the protection of analog
television programming and prerecorded movies and other
audiovisual works in relation to recording capabilities of
ordinary consumer analog video cassette recorders. The
conferees also acknowledge that numerous other activities are
underway in the private sector to develop, test, and apply
copy control technologies, particularly in the digital
environment. Subject to the other requirements of this
section, circumvention of these technologies may be
prohibited under this Act. Moreover, in some cases, these
technologies are subject to licensing arrangements that
provide legally enforceable obligations. The conferees
applaud these undertakings and encourage their continuation,
including the inter-industry meetings and working groups that
are essential to their success. If, as a result of such
activities, the participants request further Congressional
action, the conferees expect that the Congress, and the
committees involved in this Conference specifically, will
consider whether additional statutory requirements are
necessary and appropriate.
Before agreeing to include this requirement in the final
legislation, the conferees assured themselves in relation to
two critical issues--that these analog copy control
technologies do not create ``playability'' problems on normal
consumer electronics products and that the intellectual
property necessary for the operation of these technologies
will be available on reasonable and non-discriminatory terms.
In relation to the playability issue, the conferees have
received authoritative assurances that playability issues
have already been resolved in relation to the current
specifications for these technologies and that an inter-
industry forum will be established to resolve any playability
issues that may arise in the future in relation to either
revisions to the copy control specifications or development
of new consumer technologies and products.
As further explanation on the playability issue, the
conferees understand that the existing technologies were the
subject of extensive testing that included all or virtually
all of the major consumer electronics manufacturers and that
this testing resulted in modification of the specifications
to assure that the technologies do not produce noticeable
adverse effects on the normal display of content that is
protected utilizing these technologies. Currently,
all manufacturers are effectively ``on notice'' of the
existence of these technologies and their specifications
and should be able to design their products to avoid any
adverse effects.
In relation to the intellectual property licensing issues,
the owner of the analog copy control intellectual property--
Macrovision Corporation--has written a letter to the Chairman
of the Conference Committee to provide the following
assurances in relation to the licenses for intellectual
property necessary to implement these analog copy control
technologies: (1) that its intellectual property is generally
available on reasonable and non-discriminatory terms, as that
phrase is used in normal industry parlance; (2) that
manufacturers of the analog video cassette recorders that are
required by this legislation to conform to the technologies
will be provided royalty-free licenses for the use of its
relevant intellectual property in any device that plays back
packaged, prerecorded content, or that reads and responds to
or generates or carries forward the elements of these
technologies associated with such content; (3) in the same
circumstances as described in (2), other manufacturers of
devices that generate, carry forward, or read and respond to
these technologies will be provided licenses carrying only
modest fees (in the range of $25,000--in current dollars--
initial payment and lesser amounts as recurring annual fees);
(4) that manufacturers of other products, including set-top-
boxes and devices that perform similar functions (including
integrated devices containing such functionality), will
receive licenses on reasonable and non-discriminatory terms,
including royalty terms and other considerations; and (5)
that playability issues will not be the subject of license
requirements but rather will be handled through an inter-
industry forum that is being established for this purpose.
The conferees emphasize the need for the technology's
proprietor to adhere to these assurances in all future
licensing.
With regard to the specific elements of this provision:
First, these technologies operate within the general NTSC
television signal environment, and the conferees understand
that this means that they work in relation to television
signals that are of the 525/60 interlaced type, i.e., the
standard definition television signal that has been used in
the United States. The S-video and Hi-8 versions of covered
devises are, of course, included with the coverage. Further,
the new format analog video cassette recorders that are
covered by paragraph (1)(A)(v) are those that receive the
525/60 interlaced type of input.
Second, it is the conferees understanding that not all
analog video signals will utilize this technology, and,
obviously, a device that receives a signal that does not
contain these technologies need not read and respond to what
might have been there if the signal had utilized the
technology.
Third, a violation of paragraph (1) is a form of
circumvention under Section 1201(b)(1). Accordingly, the
enforcement of this provision is through the penalty
provisions applicable to Section 1201 generally. A violation
of paragraph (2) is also a violation of Section 1201 and
hence subject to those penalty provisions. The inclusion of
paragraph (5) with regard to enforcement of paragraph (2) is
intended merely to allow the particular statutory damage
provisions of Section 1203 to apply to violations of this
subsection.
Fourth, the conferees understand that minor modifications
may be necessary in the specifications for these technologies
and intend that any such modifications (and related new
``revised specifications'') should not negate in any way the
requirements imposed by this subsection. The modifications
should, however, be sufficiently minor that manufacturers of
analog video cassette recorders should be free to continue to
design products to conform to these technologies on the basis
of the specifications existing, or actually implemented by
manufacturers, as of the date of enactment of this Act.
Fifth, the provisions of paragraph (2) are intended to
operate to allow copyright owners to use these technologies
to prevent the making of a viewable copy of a pay-per-view,
near video on demand, or video on demand transmission or
prerecorded tape or disc containing one or more motion
pictures or other audiovisual works, at the same time as
consumers are afforded their customary ability to make analog
copies of programming offered through other channels or
services. Copyright owners may utilize these technologies to
prevent the making of a ``second generation'' copy where the
original transmission was through a pay television service
(such as HBO, Showtime, or the like). The basic and extended
basic tiers of programming services, whether provided through
cable or other wireline, satellite, or future over the air
terrestrial systems, may not be encoded with these
technologies at all. The inclusion of paragraph (2)(D) is not
intended to be read to authorize the making of a copy by
consumers or others in relation to pay-per-view, near video
on demand or video-on-demand transmissions or prerecorded
media.
Sixth, the exclusion of professional analog video cassette
recorders is necessary in order to allow the motion picture,
broadcasting, and other legitimate industries and individual
businesses to obtain and use equipment that is essential to
their normal, lawful business operations. As a further
explanation of the types of equipment that are to be subject
to this exception, the following factors should be used in
evaluating whether a specific product is a ``professional''
product:
(1) whether, in the preceding year, only a small number of
the devices that are of the same kind, nature, and
description were sold to consumers other than professionals
employing such devices in a lawful business or industrial
use;
(2) whether the device has special features designed for
use by professionals employing the device in a lawful
business or industrial use;
(3) whether the advertising, promotional and descriptive
literature or other materials used to market the device were
directed at professionals employing such devices in a lawful
business or industrial use;
(4) whether the distribution channels and retail outlets
through which the device is distributed and sold are ones
used primarily to make sales to professionals employing such
devices in a lawful business or industrial use; and
(5) whether the uses to which the device is most commonly
put are those associated with the work of professionals
employing the device in a lawful business or industrial use.
Seventh, paragraph (1)(B) contains a number of points
worthy of explanation. In general, the requirement in
paragraph (1)(B) is that manufacturers not materially reduce
the responsiveness of their existing products and is also
intended to be carried forward in the introduction of new
models. This is particularly important in relation to the
four-line colorstripe copy control technology, where the
basic requirement in the statute is that a model of a
recorder not be modified to eliminate conformance with the
four-line colorstripe technology and where the standard for
``conformance'' is simply that the lines be visible and
distracting in the display of a copy of material that was
protected with the technology when the copy is played back,
in normal viewing mode, by the recorder that made the copy
and displayed on a reference display device. Specific
elements of that requirement include:
(1) ``Normal viewing mode'' is intended to mean the viewing
of a program in its natural sequence at the regular speed for
playback and is not intended to allow ``AGC-stripping viewing
modes'' to be developed. It is intended to exclude still
frame or slow motion viewing from this definition.
(2) The ``reference display device'' concept is used in the
legislation to acknowledge that manufacturers of analog video
cassette
[[Page H10067]]
recorders may use a specific display device to test their
responsiveness to the colorstripe technology and then may use
the level of such responsiveness as their baseline to achieve
compliance. The reference display device for manufacturers
that make televisions is intended to be a television set also
made by that manufacturer. Where an analog video cassette
recorder manufacturer does not make display devices, that
manufacturer may choose a display device made by another
manufacturer to serve as a reference. In general, a reference
display device should be one that is generally representative
of display devices in the U.S. market at the time of the
testing.
(3) The conferees intend that the word ``model'' should be
interpreted broadly and is not to be determined exclusively
by alphabetic, numeric, name, or other label. Courts should
look with suspicion at ``new models'' that reduce or
eliminate conformance with this technology, as compared with
that manufacturer's ``previous models.'' Further, a
manufacturer should not replace a previous model that showed
intense lines with a model that shows weak lines in the
played back picture.
For any new entrant into the VHS format analog video
cassette recorder manufacturing business, the legislation
provides that such a manufacturer will build its initial
devices so as to be in conformance with the four-line
colorstripe copy control technology based on the playback on
a reference display device and thereafter not modify the
design so that its products no longer conform to this
technology.
Finally, the proprietor of the colorstripe copy control
technology has supplied the Committee with a description of
how the technology should work so as to provide the desired
copy protection benefits. That description is as follows: the
colorstripe copy control technology works as intended if a
recorder records a signal that, when played back by the
playback function of that recorder in the normal viewing
mode, exhibits on a reference display device a significant
distortion of color on the lines which begin with a
colorstripe colorburst, or a complete or intermittent loss of
color throughout at least 50% of the visible image. While the
conferees realize that there may be variations among
recorders in relation to this technology, the conferees
expect the affected manufacturers to work with the proprietor
of the technology to ensure that the basic goal of content
protection through this technology is achieved. The conferees
understand that content protection through this technology is
to the manufacturers' benefit, as well, since it encourages
content providers to release more valuable content than they
might otherwise release without such protection. The
conferees further intend that manufacturers should seek to
respond to the colorstripe technology at the highest feasible
level and should not modify their recorder designs, or
substitute weaker responding recorders for stronger
responding recorders in order to avoid the requirements of
this subsection.
Eighth, the type of colorstrip copy control technology to
which the legislation requires conformance is the four-line
``half burst'' type version of this technology. The content
provider may shift, in an adaptive fashion, from no
colorstripe encoding to the two-line version to the four-line
version, in order to balance the copy control features of
the technology against the possible playback distortion
that the four-line technology occasionally creates. This
legislation requires conformance only to the four-line
version, but prohibits any effort to eliminate or reduce
materially the effectiveness of the two-line version in
relation to any particular analog video cassette recorder
that, in fact, provides a response to the two-line
version. The legislation also applies the ``encoding
rules'' in paragraph (2) to either the two-line or four-
line versions of this technology.
Section 104. Evaluation of Impact of Copyright Law and Amendments on
Electronic Commerce and Technological Development
The Senate recedes to House section 105 with modification.
Section 105. Effective Date
The Senate recedes to House section 106. This section sets
forth the effective date of the amendments made by this
title. The corresponding sections of the House bill and the
Senate amendment are substantively identical.
Title II--Online Copyright Infringement Liability Limitation
Title II preserves strong incentives for service providers
and copyright owners to cooperate to detect and deal with
copyright infringements that take place in the digital
networked environment. At the same time, it provides greater
certainty to service providers concerning their legal
exposure for infringements that may occur in the course of
their activities.
Section 201. Short Title
The Senate recedes to House section 201. This section sets
forth the short title of the Act. The Senate accepts the
House formulation.
Section 202. Limitations on Liability for Copyright Infringement
The Senate recedes to House section 202 with modification.
This section amends chapter 5 of the Copyright Act (17 U.S.C.
501, et. seq.) to create a new section 512, titled
``Limitations on liability relating to material online.'' New
Section 512 contains limitations on service providers'
liability for five general categories of activity set forth
in subsections (a) through (d) and subsection (g). As
provided in subsection (l), Section 512 is not intended to
imply that a service provider is or is not liable as an
infringer either for conduct that qualifies for a limitation
of liability or for conduct that fails to so qualify. Rather,
the limitations of liability apply if the provider is found
to be liable under existing principles of law. This
legislation is not intended to discourage the service
provider from monitoring its service for infringing material.
Courts should not conclude that the service provider loses
eligibility for limitations on liability under section 512
solely because it engaged in a monitoring program.
The limitations in subsections (a) through (d) protect
qualifying service providers from liability for all monetary
relief for direct, vicarious and contributory infringement.
Monetary relief is defined in subsection (k)(2) as
encompassing damages, costs, attorneys' fees, and any other
form of monetary payment. These subsections also limit
injunctive relief against qualifying service providers to the
extent specified in subsection (j). To qualify for these
protections, service providers must meet the conditions set
forth in subsection (i), and service providers' activities at
issue must involve a function described in subsection (a),
(b), (c), (d) or (g), respectively. The liability limitations
apply to networks ``operated by or for the
service provider,'' thereby protecting both service
providers who offer a service and subcontractors who may
operate parts of, or an entire, system or network for
another service provider.
Subsection (b) provides for a limitation on liability with
respect to certain acts of ``system caching''. Paragraphs (5)
and (6) of this subsection refer to industry standard
communications protocols and technologies that are only now
in the initial stages of development and deployment. The
conferees expect that the Internet industry standards setting
organizations, such as the Internet Engineering Task Force
and the World Wide Web Consortium, will act promptly and
without delay to establish these protocols so that subsection
(b) can operate as intended.
Subsection (e) is included by the conferees in order to
clarify the provisions of the bill with respect to the
liability of nonprofit institutions of higher learning that
act as service providers. This provision serves as a
substitute for section 512(c)(2) of the House bill and for
the study proposed by section 204 of the Senate amendment.
In general, Title II provides that a university or other
public or nonprofit institution of higher education which is
also a ``service provider'' (as that term is defined in title
II) is eligible for the limitations on liability provided in
title II to the same extent as any other service provider.
However, the conferees recognize that the university
environment is unique. Ordinarily, a service provider may
fail to qualify for the liability limitations in Title II
simply because the knowledge or actions of one of its
employees may be imputed to it under basic principles of
respondeat superior and agency law. The special relationship
which exists between universities and their faculty members
(and their graduate student employees) when they are engaged
in teaching or research is different from the ordinary
employer-employee relationship. Since independence--freedom
of thought, word and action--is at the core of academic
freedom, the actions of university faculty and graduate
student teachers and researchers warrant special
consideration in the context of this legislation. This
special consideration is embodied in new subsection (e),
which provides special rules for determining whether
universities, in their capacity as a service provider, may or
may not be liable for acts of copyright infringement by
faculty members or graduate students in certain
circumstances.
Subsection (e)(1) provides that the online infringing
actions of faculty members or graduate student employees,
which occur when they are ``performing a teaching or research
function,'' will not be attributed to an institution of
higher education in its capacity as their employer for
purposes of section 512, if certain conditions are met. For
the purposes of subsections (a) and (b) of section 512, such
faculty member or graduate student shall be considered to be
a person other than the institution, and for the purposes of
subsections (c) and (d) of section 512 the faculty member's
or graduate student's knowledge or awareness of his or her
infringing activities will not be attributed to the
institution, when they are performing a teaching or research
function and the conditions in paragraphs (A)-(C) are met.
When the faculty member or the graduate student employee is
performing a function other than teaching or research, this
subsection provides no protection against liability for the
institution if infringement occurs. For example, a faculty
member or graduate student is performing a function other
than teaching or research when the faculty member or graduate
student is exercising institutional administrative
responsibilities, or is carrying out operational
responsibilities that relate to the institution's function as
a service provider. Further, for the exemption to apply on
the basis of research activity, the research must be a
genuine academic exercise--i.e. a legitimate scholarly or
scientific investigation or inquiry--rather than an
activity which is claimed to be research
[[Page H10068]]
but is undertaken as a pretext for engaging in infringing
activity.
In addition to the ``teaching or research function'' test,
the additional liability protections contained in subsection
(e)(1) do not apply unless the conditions in paragraphs (A)
through (C) are satisfied. First, paragraph (A) requires that
the infringing activities must not involve providing online
access to instructional materials that are ``required or
recommended'' for a course taught by the infringing faculty
member and/or the infringing graduate student within the last
three years. The reference to ``providing online access'' to
instructional materials includes the use of e-mail for that
purpose. The phrase ``required or recommended'' is intended
to refer to instructional materials that have been formally
and specifically identified in a list of course materials
that is provided to all students enrolled in the course for
credit; it is not intended, however, to refer to the other
materials which, from time to time, the faculty member or
graduate student may incidentally and informally bring to the
attention of students for their consideration during the
course of instruction.
Second, under paragraph (B) the institution must not have
received more than two notifications of claimed infringement
with respect to the particular faculty member or particular
graduate student within the last three years. If more than
two such notifications have been received, the institution
may be considered to be on notice of a pattern of infringing
conduct by the faculty member or graduate student, and the
limitation of subsection (e) does not apply with respect to
the subsequent infringing actions of that faculty member or
that graduate student. Where more than two notifications have
previously been received with regard to a particular faculty
member or graduate student, the institution will only become
potentially liable for the infringing actions of that faculty
member or that graduate student. Any notification of
infringement that gives rise to a cause of action for
misrepresentation under subsection (f) does not count for
purposes of paragraph (B).
Third, paragraph (C) states that the institution must
provide to the users of its system or network--whether they
are administrative employees, faculty, or students--materials
that accurately describe and promote compliance with
copyright law. The legislation allows, but does not require,
the institutions to use relevant informational materials
published by the U.S. Copyright Office in satisfying the
condition imposed by paragraph (C).
Subsection (e)(2) defines the terms and conditions under
which an injunction may be issued against an institution of
higher education that is a service provider in cases to which
subsection (e)(1) applies. First, all the factors and
considerations taken into account by a court under 17 U.S.C.
Sec. 502 will apply in the case of any application for an
injunction in cases covered by this subsection. In addition,
the court is also required to consider the factors of
particular significance in the digital environment listed in
subsection (j)(2). Finally, the provisions contained in
(j)(3), concerning notice to the service provider and the
opportunity to appear, are also applicable in cases to which
subsection (e)(1) applies.
The conferees also want to emphasize that nothing contained
in subsection (e) should be interpreted to establish new
liability for institutions of higher education, including
under the doctrines of respondeat superior, or of
contributory liability, where liability does not now exist.
Further, subsection (e) does not alter any of the existing
limitations on the rights of copyright owners that are
already contained in the Copyright Act. So, for example,
subsection (e) has no impact on the fair use (section 107)
doctrine or the availability of fair use in a university
setting; similarly, section 110 of the Copyright Act
dealing with classroom performance and distance learning
is not changed by subsection (e). In this regard,
subsection (e) is fully consistent with the rest of
section 512, which neither creates any new liabilities for
service providers, nor affects any defense to infringement
available to a service provider. Finally, subsection (e)
has no applicability to any case asserting that a
university is liable for copyright infringement in any
capacity other than as a service provider.
Section 203. Effective Date
The Senate recedes to House section 203. This section sets
forth the effective date of the amendments made by this
title. The corresponding sections of the House bill and the
Senate amendment are substantively identical.
Title III--Computer Maintenance or Repair Copyright Exemption
Sections 301-302
The Senate recedes to the House sections 301-302. These
sections effect a minor, yet important clarification in
section 117 of the Copyright Act to ensure that the lawful
owner or lessee of a computer machine may authorize an
independent service provider--a person unaffiliated with
either the owner or lessee of the machine--to activate the
machine for the sole purpose of servicing its hardware
components. When a computer is activated, certain software or
parts thereof is automatically copied into the machine's
random access memory, or ``RAM''. A clarification in the
Copyright Act is necessary in light of judicial decisions
holding that such copying is a ``reproduction'' under section
106 of the Copyright Act (17 U.S.C. 106),\1\ thereby calling
into question the right of an independent service provider
who is not the licensee of the computer program resident on
the client's machine to even activate that machine for the
purpose of servicing the hardware components. This section
does not in any way alter the law with respect to the scope
of the term ``reproduction'' as it is used the Copyright Act.
Rather, this section it is narrowly crafted to achieve the
objectives just described--namely, ensuring that an
independent service provider may turn on a client's computer
machine in order to service its hardware components, provided
that such service provider complies with the provisions of
this section designed to protect the rights of copyright
owners of computer software. The corresponding sections of
the House bill and the Senate amendment are substantively
identical.
---------------------------------------------------------------------------
\1\ See MAI Sys. Corp. v. Peak Computer, 991 F. 2d 511 (9th
Cir. 1993), cert. denied, 114 S. Ct. 671 (1994).
---------------------------------------------------------------------------
Title IV--Miscellaneous Provisions
Sec. 401. Provisions Relating to the Commissioner of Patents and
Trademarks and the Register of Copyrights
The Senate recedes to the House sections 401-402 with
modification. This section provides parity in compensation
between the Register of Copyrights and the Commissioner of
Patent and Trademarks and clarifies the duties and functions
of the Register of Copyrights.
The new subsection to be added to 17 U.S.C. Sec. 701 sets
forth in express statutory language the functions presently
performed by the Register of Copyrights under her
general administrative authority under subsection 701(a).
Like the Library of Congress, its parent agency, the
Copyright Office is a hybrid entity that historically has
performed both legislative and executive or administrative
functions. Eltra Corp. v. Ringer, 579 F.2d 294 (4th Cir.
1978). Existing subsection 701(a) addresses some of the
latter functions. New subsection 701(b) is intended to
codify the other traditional roles of the Copyright Office
and to confirm the Register's existing areas of
jurisdiction.
Paragraph (1) of new subsection 701(b) reflects the
Copyright Office's longstanding role as advisor to Congress
on matters within its competence. This includes copyright and
all matters within the scope of title 17 of the U.S. Code.
Such advice, which often takes the form of testimony of
pending legislation, is separate from testimony or other
recommendations by the Administration pursuant to the
President's concurrent constitutional power to make
recommendations to Congress.
Paragraph (2) reflects the Copyright Office's longstanding
role in advising federal agencies on matters within its
competence. For example, the Copyright Office advises the
U.S. Trade Representative and the State Department on an
ongoing basis on the adequacy of foreign copyright laws, and
serves as a technical consultant to those agencies in
bilateral, regional and multilateral consultations or
negotiations with other countries on copyright-related
issues.
Paragraph (3) reflects the Copyright Office's longstanding
role as a key participant in international meetings of
various kinds, including as part of U.S. delegations as
authorized by the Executive Branch, serving as substantive
experts on matters within the Copyright Office's competence.
Recent examples of the Copyright Office acting in the
capacity include its central role on the U.S. delegation that
negotiated the two new WIPO treaties at the 1996 Diplomatic
Conference in Geneva, and its ongoing contributions of
technical assistance in the TRIPS Council of the World Trade
Organization and the Register's role as a featured speaker at
numerous WIPO conferences.
Paragraph (4) describes the studies and programs that the
Copyright Office has long carried out as the agency
responsible for administering the copyright law and other
chapters of title 17. Among the most important of these
studies historically was a series of comprehensive reports on
various issues produced in the 1960's as the foundation of
the last general revision of U.S. copyright law, enacted as
the 1976 Copyright Act. Most recently the Copyright Office
has completed reports on the cable and satellite compulsory
licenses, legal protection for databases, and the economic
and policy implications of term extension. Consistent with
the Copyright Office's role as a legislative branch agency,
these studies have often included specific policy
recommendations to Congress. The reference to ``programs''
includes such projects as the conferences the Copyright
Office cosponsored in 1996-97 on the subject of technology-
based intellectual property management, and the International
Copyright Institutes that the Copyright Office has conducted
for foreign government officials at least annually over the
past decade, often in cooperation with WIPO.
Paragraph (5) makes clear that the functions and duties set
forth in this subsection are illustrative, not exhaustive.
The Register of Copyrights would continue to be able to carry
out other functions under her general authority under
subsection 701(a), or as Congress may direct. The latter may
include specific requests by Committees for studies and
recommendations on subjects within the Copyright Office's
area of competence. It may also include, when appropriate or
required for constitutional reasons, directions to the Office
in separate legislation.
sec. 402. ephemeral recordings
The Senate recedes to House section 411 with modification.
This section amends section 112 of the Copyright Act (17
U.S.C. 112)
[[Page H10069]]
to address two issues concerning the application of the
ephemeral recording exemption in the digital age. The first
of these issues is the relationship between the ephemeral
recording exemption and the Digital Performance Right in
Sound Recordings Act of 1995 (``DPRA''). The DPRA granted
sound recording copyright owners the exclusive right to
perform their works publicly by means of digital audio
transmission, subject to certain limitations, particularly
those set forth in section 114(d). Among those limitations is
an exemption for nonsubscription broadcast transmissions,
which are defined as those made by terrestrial broadcast
stations licensed as such by the FCC. 17 U.S.C.
Sec. Sec. 114(d)(1)(A)(iii) and (j)(2). The ephemeral
recording exemption presently privileges certain activities
of a transmitting organization when it is entitled to
transmit a performance or display under a license or transfer
of copyright ownership or under the limitations on exclusive
rights in sound recordings specified by section 114(a). The
House bill and the Senate amendment propose changing the
existing language of the ephemeral recording exemption
(redesignated as 112(a)(1)) to extend explicitly to
broadcasters the same privilege they already enjoy with
respect to analog broadcasts.
The second of these issues is the relationship between the
ephemeral recording exemption and the anticircumvention
provisions that the bill adds as section 1201 of the
Copyright Act. Concerns were expressed that if use of copy
protection technologies became widespread, a transmitting
organization might be prevented from engaging in its
traditional activities of assembling transmission programs
and making ephemeral recordings permitted by section 112 for
purposes of its own transmissions within its local service
area and of archival preservation and security. To address
this concern, the House bill and the Senate amendment propose
adding to section 112 a new paragraph that permits
transmitting organizations to engage in activities that
otherwise would violate section 1201(a)(1) in certain limited
circumstances when necessary for the exercise of the
transmitting organization's privilege to make ephemeral
recordings under redesignated section 112(a)(1). By way of
example, if a radio station could not make a permitted
ephemeral recording from a commercially available phonorecord
without violating section 1201(a)(1), then the radio station
could request from the copyright owner the necessary means of
making a permitted ephemeral recording. If the copyright
owner did not then either provide a phonorecord that could be
reproduced or otherwise provide the necessary means of making
a permitted ephemeral recording from the phonorecord already
in the possession of the radio station, the radio station
would not be liable for violating section 1201(a)(1) for
taking the steps necessary for engaging in activities
permitted under section 112(a)(1). The radio station would,
of course, be liable for violating section 1201(a)(1) if it
engaged in activities prohibited by that section in other
than the limited circumstances permitted by section
112(a)(1).
House section 411 is modified in two respects. First, the
House provision is modified by adding a new paragraph (3) to
include specific reference to section 114(f) in section
112(a) of the Copyright Act. The addition to section 112(a)
of a reference to section 114(f) is intended to make clear
that subscription music services, webcasters, satellite
digital audio radio services and others with statutory
licenses for the performance of sound recordings under
section 114(f) are entitled to the benefits of section 112(a)
with repsect to the sound recordings they transmit.
Second, the House provision is modified in paragraph (4).
This amendment to section 112(a) is intended to clarify the
application of section 112(a) to FCC-licensed broadcasters
with respect to digital nonsubscription broadcast
transmissions. Notwithstanding this clarification, neither
the amendment in paragraph (4) of section 411 nor the
creation of a statutory license in section 112(e) is in any
manner intended to narrow the scope of section 112(a) or the
entitlement of any transmitting entity to the exemption
provided thereunder with respect to copies made for other
transmissions.
Section 403. Limitations on Exclusive Rights; Distance Education
The Senate recedes to House section 412. The corresponding
sections of the House bill and the Senate amendment are
substantively identical.
Section 404. Exemption for Libraries and Archives
The Senate recedes to House section 413. The corresponding
sections of the House bill and the Senate amendment are
substantively identical.
Section 405. Scope of Exclusive Rights in Sound Recordings; Ephemeral
Recordings
The Senate recedes to section 415 of the House bill with
modification.
The amendments to sections 112 and 114 of the Copyright Act
that are contained in this section of the bill are intended
to achieve two purposes: first, to further a stated objective
of Congress when it passed the Digital Performance Right in
Sound Recordings Act of 1995 (``DPRA'') to ensure that
recording artists and record companies will be protected as
new technologies affect the ways in which their creative
works are used; and second, to create fair and efficient
licensing mechanisms that address the complex issues facing
copyright owners and copyright users as a result of the rapid
growth of digital audio services. This section contains
amendments to sections 112 and 114 of Title 17 as follows:
Section 114(d)(1). Exempt Transmissions and
Retransmissions. Section 114(d)(1)(A) is amended to delete
two exemptions that were either the cause of confusion as to
the application of the DPRA to certain nonsubscription
services (especially webcaster) or which overlapped with
other exemptions (such as the exemption in subsection
(A)(iii) for nonsubscription broadcast transmissions). The
deletion of these two exemptions is not intended to affect
the exemption for nonsubscription broadcast transmissions.
Section 114(d)(2). Statutory Licensing of Certain
Transmissions. The amendment to subsection (d)(2) extends the
availability of a statutory license for subscription
transmissions to cover certain eligible nonsubscription
transmissions. ``Eligible nonsubscription transmissions'' are
defined in subsection (j)(6). The amendment subdivides
subsection (d)(2) into three subparagraphs ((A), (B), and
(C)), each of which contains conditions of a statutory
license for certain nonexempt subscription and eligible
nonsubscription transmissions.
The conferees note that if a sound recording copyright
owner authorizes a transmitting entity to take an action with
respect to that copyright owner's sound recordings that is
inconsistent with the requirements set forth in section
114(d)(2), the conferees do not intend that the transmitting
entity be disqualified from obtaining a statutory license by
virtue of such authorized actions.
The conferees intend that counts considering claims of
infringement involving violation of the requirements set
forth in section 114(d)(2) should judiciously apply the
doctrine of de minimis non curat lex. A transmitting entity's
statutory license should not be lost, and it becomes subject
to infringement damages for transmissions that have been made
as part of its service, merely because, through error, it has
committed nonmaterial violations of these conditions that,
once recognized, are not repeated. Similarly, if a service
has multiple channels, the transmitting entity's statutory
license should not be lost, and it become subject to
infringement damages for transmissions that have been made
on other channels, merely because of a violation in
connection with one channel. Conversely, courts should not
apply such doctrine in cases in which repeated or
intentional violations occur.
Subparagraph (A) sets forth three conditions of a statutory
license applicable to all nonexempt subscription and eligible
nonsubscription transmissions. These three conditions are
taken from previous subsection (d)(2).
Subparagraphs (B) and (C) are alternatives: a service is
subject to the conditions in one or the other in addition to
those in subparagraph (A). Subparagraph (B) contains
conditions applicable only to nonexempt subscription
transmissions made by a preexisting subscription service in
the same transmission medium as was used by the service on
July 31, 1998 or a preexisting satellite digital audio radio
service. A preexisting subscription service is defined in
subsection (j)(11); a preexisting satellite digital audio
radio service is defined in (j)(10). The purpose of
distinguishing preexisting subscription services making
transmissions in the same medium as on July 31, 1998, was to
prevent disruption of the existing operations by such
services. There was only three such services that exist: DMX
(operated by TCI Music), Music Choice (operated by Digital
Cable Radio Associates), and the DiSH Network (operated by
Muzak). As of July 31, 1998, DMX and Music Choice made
transmissions via both cable and satellite media; the DiSH
Network was available only via satellite. The purpose of
distinguishing the preexisting satellite digital audio radio
services is similar. The two preexisting satellite digital
audio radio services, CD Radio and American Mobile Radio
Corporation, have purchased licenses at auction from the FCC
and have begun developing their satellite systems.
The two conditions contained in subparagraph (B) are taken
directly from previous subsection (d)(2). Thus, preexisting
satellite digital audio radio services and the historical
operations of preexisting subscription services are subject
to the same five conditions for eligibility for a statutory
license, as set forth in subparagraphs (A) and (B), as have
applied previously to these services.
Subparagraph (C) sets forth additional conditions for a
statutory license applicable to all transmissions not subject
to subparagraph (B), namely all eligible nonsubscription
transmissions, subscription transmissions made by a new
subscription service, and subscription transmissions made by
a preexisting subscription service other than those made in
the same transmission medium. Subparagraph (C) contains nine
conditions.
Subparagraph (C)(i) requires that transmissions subject to
a statutory license cannot exceed the sound recording
performance complement defined in subsection (j)(13), which
is unchanged by this amendment. Subparagraph (C)(i)
eliminates this requirement for retransmissions of over-the-
air broadcast transmissions by a transmitting entity that
does not have the right or ability to control the programming
of the broadcast station making the initial broadcast
transmission, subject to two limitations.
First, the retransmissions are not eligible for statutory
licensing if the retransmitted
[[Page H10070]]
broadcast transmissions are in digital format and regularly
exceed the sound recording performance complement. Second,
the retransmissions are not eligible for statutory licensing
if the retransmitted broadcast transmissions are in analog
format and a substantial portion of the transmissions,
measured on a weekly basis, violate the sound recording
performance complement. In both cases, however, the
retransmitter is disqualified from making its
transmissions under a statutory license only if the sound
recording copyright owner or its representative notifies
the retransmitter in writing that the broadcast
transmissions exceed the sound recording performance
complement. Once notification is received, the
transmitting entity making the retransmissions must cease
retransmitting those broadcast transmissions that exceed
the sound recording performance complement.
Subparagraph (C)(ii) imposes limitations on the types of
prior announcements, in text, video or audio, that may be
made by a service under the statutory license. Services may
not publish advance program schedules or make prior
announcements of the titles of specific sound recordings or
the featured artists to be performed on the service.
Moreover, services may not induce or facilitate the advance
publication of schedules or the making of prior
announcements, such as by providing a third party the list of
songs or artists to be performed by the transmitting entity
for publication or announcement by the third party. The
conferees do not intend that the term ``prior announcement''
preclude a transmitting entity from identifying specific
sound recordings immediately before they are performed.
However, services may generally use the names of several
featured recording artists to illustrate the type of music
being performed on a particular channel. Subparagraph
(C)(iii) addresses limitations for archived programs and
continuous programs, which are defined in subsections (j)(2)
and (j)(4), respectively. Subparts (I) and (II) address
archived programs. Archived programs often are available to
listeners indefinitely or for a substantial period of time,
thus permitting listeners to hear the same songs on demand
any time the visitor wishes. Transmissions that are part of
archived programs that are less than five hours long are
ineligible for a statutory license. Transmissions that are
part of archived programs more than five hours long are
eligible only if the archived program is available on the
webcaster's site or a related site for two weeks or less. The
two-week limitation is to be applied in a reasonable manner
to achieve the objectives of this subparagraph, so that, for
example, archived programs that have been made available for
two weeks are not removed from a site for a short period of
time and then made available again. Furthermore, altering an
archived program only in insignificant respects, such as by
replacing or reordering only a small number of the songs
comprising the program, does not render the program eligible
for statutory licensing.
Subparagraph (C)(iii) also limits eligibility for a
statutory license to transmissions that are not part of a
continuous program of less than three hours duration
(subparagraph (C)(iii)(III)). A listener to a continous
program hears that portion of the program that is being
transmitted to all listeners at the particular time that the
listener accesses the program, much like a person who tunes
in to an over-the-air broadcast radio station.
Finally, subparagraph (C)(iii)(IV) limits eligibility for a
statutory license to transmissions that are not part of an
identifiable program in which performances of sound
recordings are rendered in a predetermined order that is
transmitted at (a) more than three times in any two week
period, which times have been publicly announced in advance,
if the program is of less than one hour duration, or (b) more
than four times in any two week period, which times have been
publicly announced in advance, if the program is one hour or
more. It is the conferee's intention that the two-week
limitation in subclause (IV) be applied in a reasonable
manner consistent with its purpose so that, for example, a
transmitting entity does not regularly make all of the
permitted repeat performances within several days.
Subparagraph (C)(iv) states that the transmitting entity
may not avail itself of a statutory license if it knowingly
performs a sound recording, as part of a service that offers
transmissions of visual images contemporaneous with
transmissions of sound recordings, in a manner that is likely
to cause a listener to believe that there is an affiliation
or association between the sound recording copyright owner or
featured artist and a particular product or service
advertised by the transmitting entity. This would cover, for
example, transmitting an advertisement for a particular
product or service every time a particular sound recording or
artist is transmitted; it would not cover more general
practices such as targeting advertisements of particular
products or services to specific channels of the service
according to user demographics. If, for example,
advertisements are transmitted randomly while sound
recordings are performed, this subparagraph would be
satisfied.
Subparagraph (C)(v) provides that, in order to qualify for
a statutory license, a transmitting entity must cooperate
with sound recording copyright owners to prevent a
transmission recipient from scanning the transmitting
entity's transmissions to select particular sound recordings.
In the future, a device or software may be developed that
would enable its user to scan one or more digital
transmissions to select particular sound recordings or
artists requested by its user. Such devices or software would
be the equivalent of an on demand service that would not be
eligible for the statutory license. Technology may be
developed to defeat such scanning, and transmitting entities
taking a statutory license are required to cooperate with
sound recording copyright owners to prevent such scanning,
provided that such cooperation does not impose substantial
costs or burdens on the transmitting entity. This requirement
does not apply to a satellite digital audio service,
including a preexisting satellite digital audio radio
service, that is in operation, or that is licensed by the
FCC, on or before July 31, 1998.
Subparagraph (C)(vi) requires that if the technology used
by the transmitting entity enables the transmitting entity to
limit the making by the transmission recipient of
phonorecords in a digital format directly of the
transmission, the transmitting entity sets such technology to
limit such making of phonorecords to the extent permitted by
such technology. The conferees note that some software used
to ``stream'' transmissions of sound recordings enables the
transmitting entity to disable such direct digital copying of
the transmitted data by transmission recipients. In such
circumstances the transmitting entity must disable that
direct copying function. Likewise, a transmitting entity may
not take affirmative steps to cause or induce the making of
any copies by a transmission recipient. For example, a
transmitting entity may not encourage a transmission
recipient to make either digital or analog copies of the
transmission such as by suggesting that recipients should
record copyrighted programming transmitted by the entity.
Subparagraph (C)(vii) requires that each sound recording
transmitted by the transmitting entity must have been
distributed to the public under authority of the copyright
owner or provided to the transmitting entity with
authorization that the transmitting entity may perform such
sound recording. The conferees recognize that a disturbing
trend on the Internet is the unauthorized performance of
sound recordings not yet released for broadcast or sale to
the public. The transmission of such pre-released sound
recordings is not covered by the statutory license unless the
sound recording copyright owner has given explicit
authorization to the transmitting entity. This subparagraph
also requires that the transmission be made from a
phonorecord lawfully made under the authority of the
copyright owner. A phonorecord provided by the copyright
owner or an authorized phonorecord purchased through
commercial distribution channels would qualify. However,
the transmission of bootleg sound recordings (e.g., the
recording of a live musical performance without the
authority of the performer, as prohibited by Chapter 11)
is ineligible for a statutory license.
Subparagraph (C)(viii) conditions a statutory license on
whether a transmitting entity has accommodated and does not
interfere with technical measures widely used by sound
recording copyright owners to identify or protect their
copyrighted works. Thus, the transmitting entity must ensure
that widely used forms of identifying information, embedded
codes, encryption or the like are not removed during the
transmission process, provided that accommodating such
measures is technologically feasible, does not impose
substantial costs or burdens on the transmitting entity, and
does not result in perceptible degradation of the digital
audio or video signals being transmitted. This requirement
shall not apply to a satellite digital audio service,
including a preexisting satellite digital audio radio
service, that is in operation, or that is licensed under the
authority of the Federal communications Commission, on or
before July 31, 1998, to the extent that such service has
designed, developed or made commitments to procure equipment
or technology that is not compatible with such technical
measures before such technical measures are widely adopted by
sound recording copyright owners.
Subparagraph (C)(ix) requires transmitting entities
eligible for the statutory license to identify in textual
data the title of the sound recording, the title of the album
on which the sound recording appears (if any), and the name
of the featured recording artist. These titles and names must
be made during, but not before, the performance of the sound
recording. A transmitting entity must ensure that the
identifying information can easily be seen by the
transmission recipient in visual form. For example, the
information might be displayed by the software player used on
a listener's computer to decode and play the sound recordings
that are transmitted. Many webcasters already provide such
information, but in order to give those who do not an
adequate opportunity to do so this obligation does not take
effect until one year after the effective date of the
amendment. This requirement does not apply to the
retransmission of broadcast transmissions by a transmitting
entity that does not have the right or ability to control the
programming of the broadcast station making the broadcast
transmission, or where devices or technology intended for
receiving the service that have the capability to display the
identifying information are not common in the marketplace.
Section 114(f). Licenses for Certain Nonexempt
Transmissions. Section 114(f) is amended to
[[Page H10071]]
set forth procedures for determining reasonable rates and
terms for those transmissions that qualify for statutory
licensing under section 114(d)(2). Section 114(f) is divided
into two parts: one applying to transmissions by preexisting
subscription services and preexisting satellite digital audio
radio services (subsection (f)(1)), and the other applying to
transmissions by new subscription services (including
subscription transmissions made by a preexisting subscription
service other than those that qualify under subsection
(f)(1)) as well as eligible nonsubscription transmissions
(subsection (f)(2)).
Subsection (f)(1) provides for procedures applicable to
subscription transmission by preexisting subscription
services and preexisting satellite digital audio radio
services. The conferees note that this subsection applies
only to the three services considered
preexisting subscription services, DMX, Music Choice and
the DiSH Network, and the two services considered
preexisting satellite digital audio radio services, CD
Radio and American Mobile Radio Corporation. The
procedures in this subsection remain the same as those
applicable before the amendment, except that the rate
currently in effect under prior section 114(f) is extended
from December 31, 2000 until December 31, 2001. That rate
currently applies to the three preexisting subscription
services, and the Conferees take no position on its
applicability to the two preexisting satellite digital
audio radio services. Likewise, the initiation of the next
voluntary negotiation period shall take place in the first
week of January 2001 instead of January 2000 (subsection
(f)(1)(C)(i)). These extensions are made purely to
facilitate the scheduling of proceedings.
Subsection (f)(1)(B), which sets forth procedures for
arbitration in the absence of negotiated license agreement,
continues to provide that a copyright arbitration royalty
panel should consider the objectives set forth in section
801(b)(1) as well as rates and terms for comparable types of
subscription services.
Subsection (f)(2) addresses procedures applicable to
eligible nonsubscription transmissions and subscription
transmissions by new subscription services. The first such
voluntary negotiation proceeding is to commence within 30
days after the enactment of this amendment upon publication
by the Librarian of Congress of a notice in the Federal
Register. The terms and rates established will cover
qualified transmissions made between the effective date of
this amendment and December 31, 2000, or such other date as
the parties agree.
Subsection (f)(2) directs that rates and terms must
distinguish between the different types of eligible
nonsubscription transmission services and new subscription
services then in operation. The conferees recognize that the
nature of qualified transmissions may differ significantly
based on a variety of factors. The conferees intend that
criteria including, but not limited to, the quantity and
nature of the use of sound recordings, and the degree to
which use of the services substitutes for or promotes the
purchase of phonorecords by consumers may account for
differences in rates and terms between different types of
transmissions.
Subsection (f)(2) also directs that a minimum fee should be
established for each type of service. A minimum fee should
ensure that copyright owners are fairly compensated in the
event that other methodologies for setting rates might deny
copyright owners an adequate royalty. For example, a
copyright arbitration royalty panel should set a minimum fee
that guarantees that a reasonable royalty rate is not
diminished by different types of marketing practices or
contractual relationships. For example, if the base royalty
for a service were a percentage of revenues, the minimum fee
might be a flat rate per year (or a flat rate per subscriber
per year for a new subscription service).
Also, although subsection (f)(1) remains silent on the
setting of a minimum fee for preexisting subscription
services and preexisting satellite digital audio radio
services, the Conferees do not intend that silence to mean
that a minimum fee may or may not be established in
appropriate circumstances when setting rates under subsection
(f)(1) for preexisting subscription services and preexisting
satellite digital audio radio services. Likewise, the absence
of criteria that should be taken into account for
distinguishing rates and terms for different services in
subsection (f)(1) does not mean that evidence relating to
such criteria may not be considered when adjusting rates and
terms for preexisting subscription services and preexisting
satellite digital audio radio services in the future.
Subsection (f)(2)(B) sets forth procedures in the absence
of a negotiated license agreement for rates and terms for
qualifying transmissions under this subsection. Consistent
with existing law, a copyright arbitration proceeding should
be empaneled to determine reasonable rates and terms. The
test applicable to establishing rates and terms is what a
willing buyer and willing seller would have arrived at in
marketplace negotiations. In making that determination, the
copyright arbitration royalty panel shall consider economic,
competitive and programming information presented by the
parties including, but not limited to, the factors set forth
in clauses (i) and (ii).
Subsection (f)(2)(C) specifies that rates and terms for new
subscription and eligible nonsubscription transmissions
should be adjusted every two years, unless the parties agree
as to another schedule. These two-year intervals are based
upon the conferees' recognition that the types of
transmission services in existence and the media in which
they are delivered can change significantly in a short period
of time.
Subsection (j)(2)--``archived program.'' A program is
considered an ``archived program'' if it is prerecorded or
preprogrammed, available repeatedly on demand to the public
and is performed in virtually the same order from the
beginning.
The exception to the definition of ``archived program'' for
a recorded event or broadcast transmission is intended to
allow webcasters to make available on demand transmissions of
recorded events or broadcast shows that do not include
performances of entire sound recordings or feature
performances of sound recordings (such as a commercially
released sound recording used as a theme song), but that
instead use sound recordings only in an incidental manner
(such as in the case of brief musical transitions in and out
of commercials and music played in the background at sporting
events). Some broadcast shows may be part of series that do
not regularly feature performances of sound recordings but
that occasionally prominently include a sound recording (such
as a performance of a sound recording in connection with an
appearance on the show by the recording artist). The recorded
broadcast transmission of the show should not be considered
an ``archived program'' merely because of such a prominent
performance in a show that is part of a series that does not
regularly feature performances of sound recordings. The
inclusion of this exception to the definition of ``archived
program'' is not intended to impose any new license
requirement where the broadcast programmer or syndicator
grants the webcaster the right to transmit a sound recording,
such as may be the case where the sound recording has been
specially created for use in a broadcast show.
Subsection 114(j)(4)--``continuous program.'' A
``continuous program'' is one that is continuously performed
in the same predetermined order. Such a program generally
takes the form of a loop whereby the same set of sound
recordings is performed repeatedly; rather than stopping at
the end of the set, the program automatically restarts
generally without interruption. In contrast to an archived
program (which always is accessed from the beginning of the
program), a transmission recipient typically accesses a
continuous program in the middle of the program. Minor
alterations in the program should not render a program
outside the definition of ``continuous program.''
Subsection 114(j)(6)--``eligible nonsubscription
transmission''. An ``eligible nonsubscription transmission''
is one that meets the following criteria. First, the
transmission must be noninteractive and nonsubscription in
nature. Second, the transmission must be made as part of a
service that provides audio programming consisting in whole
or in part of performances of sound recordings. Third, the
purpose of the transmission service must be to provide
audio or entertainment programming, not to sell, advertise
or promote particular goods or services. Thus, for
example, an ordinary commercial Web site that was
primarily oriented to the promotion of a particular
company or to goods or services that are unrelated to the
sound recordings or entertainment programming, but that
provides background music would not qualify as a service
that makes eligible nonsubscription transmissions. The
site's background music transmissions would need to be
licensed through voluntary negotiations with the copyright
owners. However, the sale or promotion of sound
recordings, live concerts or other musical events does not
disqualify a service making a nonsubscription
transmission. Furthermore, the mere fact that a
transmission service is advertiser-based or may promote
itself or an affiliated entertainment service does not
disqualify it from being considered an eligible
nonsubscription transmission service.
Subsection 114(j)(7)--``interactive service.'' The
definition of ``interactive service'' is amended in several
respects. First, personalized tranmissions--those that are
specially created for a particular individual--are to be
considered interactive. The recipient of the transmission
need not select the particular recordings in the program for
it to be considered personalized, for example, the recipient
might identify certain artists that become the basis of the
personal program. The conferees intend that the phrase
``program specially created for the recipient'' be
interpreted reasonably in light of the remainder of the
definition of ``interactive service.'' For example, a service
would be interactive if it allowed a small number of
individuals to request that sound recordings be performed in
a program specially created for that group and not available
to any individuals outside of that group. In contrast, a
service would not be interactive if it merely transmitted to
a large number of recipients of the service's transmissions a
program consisting of sound recordings requested by a small
number of those listeners.
Second, a transmission of a particular sound recording on
request is considered interactive ``whether or not [the sound
recording is] part of a program.'' This language clarifies
that if a transmission recipient is permitted to select
particular sound recordings in a prerecorded or predetermined
program, the transmission is considered interactive. For
example, if a transmission recipient has the ability to move
forward and
[[Page H10072]]
backward between songs in a program, the transmission is
interactive. It is not necessary that the transmission
recipient be able to select the actual songs that comprise
the program. Additionally, a program consisting only of one
sound recording would be considered interactive.
Third, the definition of ``interactive service'' is amended
to clarify that certain channels or programs are not
considered interactive provided that they do not
substantially consist of requested sound recordings that are
performed within one hour of the request or at a designated
time. Thus, a service that engaged in the typical broadcast
programming practice of including selections requested by
listeners would not be considered interactive, so long as the
programming did not substantially consist of requests
regularly performed within an hour of the request, or at a
time that the transmitting entity informs the recipient it
will be performed.
The last sentence of the definition is intended to make
clear that if a transmitting entity offers both interactive
and noninteractive services then the noninteractive
components are not to be treated as part of an interactive
service, and thus are eligible for statutory licensing
(assuming the other requirements of the statutory license are
met). For example, if a Web site offered certain programming
that was transmitted to all listeners who chose to receive it
at the same time and also offered certain sound recordings
that were transmitted to particular listeners on request,
the fact that the latter are interactive transmissions
would not preclude statutory licensing of the former.
Subsection 114(j)(8)--``new subscription service.'' A ``new
subscription service'' is any service that is not a
preexisting subscription service as defined in subsection
(j)(11) or a preexisting satellite digital audio radio
service as defined in subsection (j)(10).
Subsection 114(j)(10)--``preexisting satellite digital
audio radio service.'' A ``preexisting satellite digital
audio service'' is a subscription digital audio radio service
provided pursuant to a satellite digital audio radio service
license issued by the Federal Communications Commission on or
before July 31, 1998. Subscription services offered by these
licensed entities do not qualify as ``preexisting
subscription services'' under section 114(j)(11) because they
had not commenced making transmissions to the public for a
fee on or before July 31, 1998. Only two entities received
these licenses: CD Radio and American Mobile Radio
Corporation.
A ``preexisting satellite digital audio radio service'' and
``preexisting subscription service'' may both include a
limited number of sample channels representative of the
subscription service that are made available on a
nonsubscription basis in order to promote the subscription
service. Such sample channels are to be treated as part of
the subscription service and should be considered in
determining the royalty rate for such subscription service.
The conferees do not intend that the ability to offer such
sample channels be used as a means to offer a nonsubscription
service under the provisions of section 114 applicable to
subscription services. The term ``limited number'' should be
evaluated in the context of the overall service. For example,
a service consisting of 100 channels should have no more than
a small percentage of its channels as sample channels.
Subsection 114(j)(11)--``preexisting subscription
service.'' A ``preexisting subscription service'' is a
noninteractive subscription service that was in existence and
was making transmissions to the public on or before July 31,
1998, and which is making transmissions similar in character
to such transmissions made on or before July 31, 1998. Only
three services qualify as a preexisting subscription
service--DMX, Music Choice and the DiSH Network. As of July
31, 1998, DMX and Music Choice made transmissions via both
cable and satellite media; the DiSH Network was available
only via satellite.
In grandfathering these services, the conferee's objective
was to limit the grandfather to their existing services in
the same transmission medium and to any new services in a new
transmission medium where only transmissions similar to their
existing service are provided. Thus, if a cable subscription
music service making transmissions on July 31, 1998, were to
offer the same music service through the Internet, then such
Internet service would be considered part of a preexisting
subscription service.
If, however, a subscription service making transmissions on
July 31, 1998, were to offer a new service either in the same
or new transmission medium by taking advantages of the
capabilities of that medium, such new service would not
qualify as a preexisting subscription service. For example, a
service that offers video programming, such as advertising or
other content, would not qualify as a preexisting service,
provided that the video programming is not merely information
about the service itself, the sound recordings being
transmitted, the featured artists, composers or songwriters,
or an advertisement to purchase the sound recording
transmitted.
Section 114 in General. These amendments are fully subject
to all the existing provisions of section 114. Specifically,
these amendments and the statutory licenses they create are
all fully subject to the safeguards for copyright owners of
sound recordings and musical works contained in sections
114(c), 114(d)(4) and 114(i), as well as the other provisions
of section 114. In addition, the conferees do not intend to
affect any of the rights in section 115 that were clarified
and confirmed in the DPRA.
Section 112(e)--Statutory License. Section 112(e) creates a
statutory license for the making of an ``ephemeral
recording'' of a sound recording by certain transmitting
organizations. The new statutory license in section 112(e) is
intended primarily for the benefit of entities that transmit
performances of sound recordings to business establishments
pursuant to the limitation on exclusive rights set forth in
section 114(d)(1)(C)(iv). However, the new section 112(e)
statutory license also is available to a transmitting entity
with a statutory license under section 114(f) that chooses to
avail itself of the section 112(e) statutory license to make
more than the one phonorecord it is entitled to make under
section 112(a). For example, the conferees understand that a
webcaster might wish to reproduce multiple copies of a sound
recording to use on different servers or to make
transmissions at different transmission rates or using
different transmission software. Under section 112(a), as
amended by this bill, a webcaster with a section 114(f)
statutory license is entitled to make only a single copy of
the sound recording. Thus, the webcaster might choose to
obtain a statutory license under section 112(e) to allow it
to make such multiple copies. The conferees intend that the
royalty rate payable under the statutory license may reflect
the number of phonorecords of a sound recording made under a
statutory license for use in connection with each type of
service.
Ephemeral recordings of sound recordings made by certain
transmitting organizations under section 112(e) may embody
copyrighted musical compositions. The making of an ephemeral
recording by such a transmitting organization of each
copyrighted musical composition embodied in a sound recording
it transmits is governed by existing section 112(a) (or
section 112(a)(1) as revised by the Digital Millennium
Copyright Act), and, pursuant to that section, authorization
for the making of an ephemeral recording is conditioned in
part on the transmitting organization being entitled to
transmit to the public the performance of a musical
composition under a license or transfer of the copyright.
The conditions listed in section 112(e)(1), most of which
are also found in section 112(a), must be met before a
transmitting organization is eligible for statutory licensing
in accordance with section 112(e). First, paragraph (1)(A)
provides that the transmitting organization may reproduce and
retain only one phonorecord, solely for its own use (unless
the terms and conditions of the statutory license allow for
more). Thus, trafficking in ephemeral recordings, such as by
preparing prerecorded transmission programs for use by third
parties, is not permitted. This paragraph provides that the
transmitting organization may reproduce and retain more than
one ephemeral recording, in the manner permitted under the
terms and conditions as negotiated or arbitrated under the
statutory license. This provision is intended to facilitate
efficient transmission technologies, such as the use of
phonorecords encoded for optimal performance at different
transmission rates or use of different software programs to
receive the transmissions.
Second, paragraph (1)(B) requires that the phonorecord be
used only for the transmitting organization's own
transmissions originating in the United States, and such
transmissions must be made under statutory license pursuant
to section 114(f) or the exemption in section
114(d)(1)(C)(iv). Third, paragraph (1)(C) mandates that,
unless preserved exclusively for archival purposes, the
phonorecord be destroyed within six months from the time
that the sound recording was first performed publicly by
the transmitting organization. Fourth, paragraph (1)(D)
limits the statutory license to reproductions of sound
recordings that have been distributed to the public and
that are made from a phonorecord lawfully made and
acquired under the authority of the copyright owner.
Subsection (e)(3) clarifies the applicability of the
antitrust laws to the use of common agents in negotiations
and agreements relating to statutory licenses and other
licenses. Under this subsection, the copyright owners of
sound recordings and transmitting organizations entitled to
obtain the statutory license in this section may negotiate
collectively regarding rates and terms for the statutory
license or other licenses. This subsection provides that such
copyright owners and transmitting organizations may designate
common agents to represent their interests to negotiate or
administer such license agreements. This subsection closely
follows the language of existing antitrust exemptions in
copyright law, including the exemption found in the statutory
licenses for transmitting sound recordings by digital audio
transmission found in section 114(f).
Subsections (e)(4) and (5) address the procedures for
determining rates and terms for the statutory license
provided for in this section. These procedures are parallel
to the procedures found in section 114(f)(2) for public
performances of sound recordings by digital audio
transmission by new subscription services and services making
eligible Nonsubscription transmissions.
Subsection (e)(4) provides that the Librarian of Congress
should publish notice of voluntary negotiation proceedings 30
days after enactment of this amendment. Such voluntary
negotiation proceedings should address rates and terms for
the making of ephemeral recordings under the conditions of
[[Page H10073]]
this section for the period beginning on the date of
enactment and ending on December 31, 2000. This subsection
requires that a minimum fee be established as part of the
rates and terms.
In the event that interested parties do not arrive at
negotiated rates and terms during the voluntary negotiation
proceedings, subsection (e)(5) provides for the convening of
a copyright arbitration royalty panel to determine reasonable
rates and terms for the making of ephemeral recordings under
this subsection. This paragraph requires the copyright
arbitration royalty panel to establish rates that reflect the
fees that a willing buyer and seller would have agreed to in
marketplace negotiations. In so doing, the copyright
arbitration royalty panel should base its decision on
economic, competitive and programming information presented
by the parties, including, but not limited to, such evidence
as described in subparagraphs (A) and (B).
Subseciton (e)(7) states that rates and terms either
negotiated or established pursuant to arbitration shall be
effective for two-year periods, and the procedures set forth
in subsections (e)(4) and (5) shall be repeated every two
years unless otherwise agreed to by the parties.
The conferees intend that the amendments regarding the
statutory licenses in sections 112 and 114 contained in
section 415 of this bill apply only to those statutory
licenses.
section 406. assumption of contractual obligations related to transfers
of rights in motion pictures
The Senate recedes to House section 416 with modification.
Paragraph (a)--Assumption of obligations. The conferees
have added to paragraph (a) language that defines more
specifically the meaning of the ``knows or has reason to
know'' standard in subsection (a)(1). There are three ways to
satisfy this standard. The first is actual knowledge that a
motion picture is or will be covered by a collective
bargaining agreement. Subparagraph (ii) provides for
constructive knowledge, established through two
alternative mechanisms: recordation with the Copyright
Office or identification of the motion picture on an
online web site maintained by the relevant Guild, where
the site makes it possible for users to verify their
access date in a commercially reasonable way. In order to
ensure that the transferee has a reasonable opportunity to
obtain the relevant information, these mechanisms for
providing constructive notice apply with respect to
transfers that take place after the motion picture is
completed. They also apply to transfer that take place
before the motion picture is completed, but only if the
transfer is within eighteen months prior to the filing of
an application for copyright registration for the motion
picture or, if there is no application for registration,
within eighteen months of its first publication in the
United States.
The constructive notice established by recordation for
purposes of application of this section is entirely separate
and independent from the constructive notice established by
recordation under section 205(c) of the Copyright Act. This
section does not condition constructive notice on prior
registration of the motion picture with the Copyright Office,
and does not have any hearing on the issue of priority
between conflicting transfers as described in section 205(d)
of the Copyright Act.
Subparagraph (iii) provides a more general standard for
circumstances where the transferee does not have actual
knowledge or constructive knowledge through one of the two
mechanisms set out in subparagraph (ii), but is aware of
facts and circumstances about the transfer that make it
apparent that the motion picture is subject to a collective
bargaining agreement. Such facts and information might
include, for example, budget, location of principal
photography, the identity of the talent associated with a
project, or the existence of a personal service contract that
references terms or conditions of collective bargaining
agreements.
Paragraph (b)--Scope of exclusion of transfer of public
performance rights.--New paragraph (b) clarifies that the
``public performance'' exclusion from the operation of
paragraph (a) is intended to include performances described
in paragraph (b) that reach viewers through transmission or
retransmission of programming or program services via
satellite, MMDS, cable, and other means of carriage. This
paragraph does not expand or restrict in any way what
constitutes a ``public performance'' for any other purpose.
The public performance exclusion would not be rendered
inoperable simply because a transfer of public performance
rights is accompanied by a transfer of limited, incidental
other rights necessary to implement or facilitate the
exercise of the performance rights.
Paragraph (c)--Exclusion for grants of security
interests.--The purpose of this paragraph is to ensure that
banks and others providing financing for motion pictures will
not be made subject to the assumption of obligations required
by this section merely because they obtain a security
interest in the motion picture. Because the term ``transfer
of copyright ownership'' is defined in section 101 of the
Copyright Act to include a ``mortgage . . . or
hypothecation'' of any exclusive copyright right, this could
be the unintended result of the statutory language. Under
this exclusion, a bank or other party would not be subject to
the application of paragraph (a) based solely on the acts of
taking a security interest in a motion picture, foreclosing
on that interest or otherwise exercising its rights as a
secured party, or transferring or authorizing transfer of
copyright ownership rights secured by its security interest
to a third party. Neither would any subsequent transferee
downstream from the initial secured party be subject
to paragraph (a). The exclusion would apply irreespective
of the form or language used to grant or create the
security interest.
It should be clear that the only agreements whose terms are
enforced by this section are collective bargaining agreements
and assumption agreements. In the course of financing a
motion picture, a lender, other financier or completion
guarantor may execute an inter-creditor or subordination
agreement with a union including obligations with respect to
the payment of residuals or the obtaining of assumption
agreements. Such agreements are not within the scope of this
section, and nothing in this section obligates lenders, other
financiers or completion guarantors to enter into these
agreements, enforces any terms thereof or diminishes any
rights that the parties may have under these agreements.
Paragraph (d)--Deferral pending resolution of bona fide
dispute. Paragraph (d) allows a remote transferee obligated
under paragraph (a)(1) to stay enforcement of this section
while there exists a bona fide dispute between the applicable
union and a prior transferor regarding obligations under this
section. It contemplates that union claims not subject to
bona fide dispute will be payable when due under the
applicable collective bargaining agreement or through
application of this section. Such disputes may be manifested
through grievance or arbitration claims, litigation, or other
claims resolution procedures in effect between the applicable
parties.
Paragraph (e)--Scope of obligations determined by private
agreement. Paragraph (e) states explicitly the basic
principle of operation of this section. It makes clear that
the section simply provides an enforcement mechanism for
obligations that have already been agreed to in a collective
bargaining agreement. It is not intended to affect in any way
the scope or interpretation of the provisions of, or the acts
required by, any collective bargaining agreement. The rights
and obligations themselves, as well as the remedies for
breach, are those that have been agreed to among the parties.
Accordingly, they can be changed at any time by agreement.
The collective bargaining agreements contemplate that
producers will obtain assumption agreements from distributors
in certain circumstances. The statute states that where a
producer does not comply with the obligation and obtain an
assumption agreement where required, the law will act as
though the producer has in fact done so. Thus, it removes the
possibility of noncompliance with the obligation to obtain an
assumption agreement. It does not require assumption
agreements to be obtained in circumstances where the
collective bargaining agreement would not require it. If
there is a dispute over the meaning and applicabiity of
provisions in the collective bargaining agreement, for
example over the question of which distributors must be
required to execute an assumption agreement, the statue does
not resolve the dispute. It only requires whatever the
collective bargaining agreement would require, and relegates
the parties to the dispute mechanisms set out in that
agreement.
This section does not expand or diminish rights or
obligations under other laws that might regulate contractual
obligations beyond the purpose of enforcing assumption
agreements required by applicable collective bargaining
agreements. Nor does this section prevent a person or entity
that is subject to obligations under an assumption agreement
(whether through application of this section or otherwise)
from transferring any such obligations to a subsequent
transferee of the applicable copyright rights, and thereby
being relieved of its own obligations under the assumption
agreement, to the extent permitted by, and under the
conditions established in, the applicable assumption
agreements.
Title V--Protection of Certain Original Designs
Sections 501-505. The Senate recedes to House sections 601-
602 with modification.
From the Committee on Commerce for consideration of the House
bill, and the Senate amendment, and modifications committed
to conference:
Tom Bliley,
Billy Tauzin,
John D. Dingell,
From the Committee on Judiciary for consideration of the
House bill, and the Senate amendment, and modifications
committed to conference:
Henry J. Hyde,
Howard Coble,
Bob Goodlatte,
John Conyers, Jr.,
Howard L. Berman,
Managers on the Part of the House.
Orrin G. Hatch,
Strom Thurmond,
Patrick J. Leahy,
Managers on the Part of the Senate.
[[Page H10074]]
{time} 0140
ADJOURNMENT
Mr. LEACH. Mr. Speaker, I move that the House do now adjourn.
The motion was agreed to; accordingly (at 1 o'clock and 40 minutes
a.m.), the House adjourned until 9 a.m. today.
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